The pandemic brought a lot of unforeseen things with it. One of the biggest things it came with were programs to help people out temporarily. Stimulus checks, a moratorium on evictions, a pause on student loan payments, and interest were all parts of these programs. Out of these programs, it is only the student loans that remain in effect.
The freeze on student loans was the first of its kind. The trickle-down result of this program has been the removal of people using privatized student loan products and taking a massive chunk out of their profits. With the freeze currently set to expire on May 1st, many private loan companies are lobbying to have the freeze stop there, although President Biden is under intense pressure from both sides.
The liberals would have you believe that this has all been for the best. That people’s loans need to be forgiven because of the rising costs of school when it’s an industry that has simply kept up with inflation. Professors’ salaries, running the a/c or heat 24/7, new computer labs, crisp uniforms for the football team, carpet in the dean’s office. All these things cost more than they did back when the more seasoned and established liberals went to school. All these inflated costs need to be paid by somebody. Certainly, alumni cannot foot all that cost, so the cost for a degree went up.
Students know that the costs went up, and they were willing to pay that cost to get the diploma. When they took these loans, nobody forced them into the program, and nobody forced them to borrow more than they needed. Instead, they chose to take these loans, and now the people need their money back. Both the American taxpayer whose taxes cover the federal loans and the private investor who has shares of these privatized lending companies.
SoFi is one of the biggest privatized companies in the U.S. Earlier this month, they informed their investors that the Biden freeze has potentially put them in serious trouble. According to leadership, the latest Biden freeze in December looked to reduce their profit margins by 20-25 million dollars in the first quarter of 2022 alone. This kind of news can rattle investors and their money needs to grow from that investment.
Numerous large and small market private lenders and their lobbyists have reached out to offices for both Republicans and Democrats across Capitol Hill to try and get their message heard. Their attempts to counter and block out the big-wig Democrats who have come out asking for yet another extension, if not outright forgiveness. This cry of the left for more time or just to end the loans program altogether is based on a Biden campaign tactic.
The promise of free community college and write-off student loans was attractive to many on the left and in the middle. Biden came in like a leftist Robin Hood, promising that he would steal the profits away from the private loan industry, and would put it back in the hands of the people who borrowed it. Ultimately, these people know the money will have to come from somewhere. Instead of accepting the responsibility they took on when they signed the dotted line, they now expect others to take it on. Just as Biden promised.
SoFi and CommonBond have teamed up and issued a joint statement in the hopes of getting things back on track. “Extending the payment and interest moratorium continues to be costly and inefficient.” They contend that pandemic relief is “wasting taxpayer funds by providing payment relief to all borrowers, including wealthy, high-earning borrowers, instead of using those funds for the neediest borrowers.” This statement as a whole is a powerful one to be making. They recognize that some can afford to start paying the loans back, and they are the ones who should be doing so.