President Biden intends to take executive action to forgive $10,000 in federal student loans per borrower. Progressives want more — $50,000 in relief per borrower. Critics argue that loan forgiveness spends up to $1 trillion to help high earners at the top more than those struggling at the bottom. The progressives and the critics are both right. Financially strapped borrowers need more than $10,000 in relief while many who would benefit from blanket loan cancellation earn enough to relatively easily repay their student loans.
But what if Biden could forgive $100,000 in student loans for those who truly need it for the same price as the plan to forgive $10,000 loans for every borrower? Biden could go this bold while satisfying his critics through a smarter mechanism: bankruptcy. Rather than forgiving $10,000 or $50,000 indiscriminately, taking executive action to allow borrowers to have student loan debt forgiven through bankruptcy means