Biden’s Loan Forgiveness Is The Wrong Prescription

Thomas F Campenni
3 min readAug 26, 2022


Biden’s student loan forgiveness largess will not solve the problem of student debt because it is a one off and not a systemic answer to the high cost of college.

That forgiveness of debt may be wonderful for those borrowers receiving it, but what about earlier borrowers who didn’t receive any forgiveness? My kids were fortunate enough not to have any debt follow them since I was able to pay for their college, I think I should get a piece of that pie too for fairness.

Forget about the unfunded half a trillion-dollar deficit that this will cause. We can debate forever the fairness issue touched on above. There is the theory that the savings on loan forgiveness are regressive since more money goes to upper income Americans. The question is how does this bailout fix the real problem of run-away tuition that is causing students to be in debt in the past, present, and future?

Megan McArdle wrote a column in the Wahington Post on August 24th regarding Biden’s announcement of up to $20,000 of student debt being forgiven for most borrowers. She mentions the 1997 bill passed by Congress that stopped Medicare from paying doctors more than the growth in GDP.

Over the years, Congress suspended the medical caps to keep the doctors and seniors happy. This became a yearly event like the farce about raising the debt limit. By 2013, doctors were facing a pay cut of 26.5%. Obama in 2015 pushed a very expensive reform of the system ending the Medicare yearly political dance of will Congress or won’t it pass another moratorium.

This debt forgiveness is similar since it takes care of an immediate need but does nothing to reform the reason for runaway debt. Unless the government reforms not only who is eligible to receive loans but how much can be borrowed through any government program, we will find a new crop of graduates in this same boat.

It would make more sense for the government to institute changes to the government backed loan system that drive up the cost of post-secondary education. The number one reform would be to fund 2-year associate degrees free of charge at community colleges for academic subjects and professions but also for vocational training for the trades including the service industry.

At the dawn of the 20th century, we decided that high school should be available for all. Many localities made attending high school mandatory at least until the age of 16. Now three decades into the 21st century, we need to do the same for two years of post-high school education.

And I do mean two years for associate degree and four years for a traditional degree. After that the student must pay the continued cost for that degree or technical training. For some, the traditional 4 years of college has turned into 5,6, or 7 years of time to earn what should be a 4-year degree. That is fine but no government largess should be provided.

In today’s world, we must think differently than we did before. An associate degree or an equivalent certificate in a trade is needed for the best paying jobs and careers. The other advantage is that instead of paying thousands of dollars in tuition to take basic courses at 4-year universities or trade schools, students can do it at virtually no cost and live at home.

That doesn’t mean that students could not go to an expensive college or university for four years. It just means that there would be no government subsidized loan for the first two years. After that, government-backed loans would be capped at a reasonable amount. This would immediately drive down the price of tuition and stabilize the market.

President Biden’s unilateral act of forgiveness is a typical Liberal gesture. It reminds me of the adage about the difference of giving a person a fish and teaching them how to fish. We will always have new students entering post-secondary education…how we pay for it as a nation is really the question.

The current system is a subsidy for universities and private schools. It allows those institutions to charge whatever they want because of federal guaranteed loan programs. Wouldn’t it be better to use that money for the students benefits directly?

Harvard (Pinterest)



Thomas F Campenni

Currently lives in Stuart Florida and former City Commissioner. His career has been as a commercial real estate owner, broker and manager in New York City.