If you lent someone money to start a business that made big bucks, you would expect to be repaid, right? You took a risk and the borrower profited. Federal student lending is kind of like that, only you did not choose to lend, and now there is a movement to let the borrower just keep the money — through presidential decree, no less.
Sens. Chuck Schumer and Elizabeth Warren are leading a call for the incoming Joe Biden administration to cancel huge amounts of federal student debt, which is close to all student debt since the federal government — read: the taxpayer — is by far the biggest supplier of student loans. Schumer and Warren have sponsored a resolution calling for up to $50,000 in loan cancellation for an open-ended number of federal student debtors, though Schumer has subsequently mentioned capping eligibility at income of $125,000, which would exclude only about the top 10% of earners.