Your anger about student debt forgiveness is misplaced

If you are angry about the student loan forgiveness, I understand your anger, but it is misplaced. And if the core of your reasoning is grounded in "personal responsibility" or some concept of moral hazard, that argument is not nearly as simple as you make it out to be.

I'd like to explain why.

If you are not familiar with how student loan programs have been run for the last couple of decades, the reality is that they're rife with scams, fraudulent and deceptive practices, and usurious practices that are illegal in nearly every other context. Also, for decades student loan debt has been neither dischargeable nor even substantially modifiable in bankruptcy due to a loophole that was lobbied for by the banking industry.

Some loan processing companies have even tried to go after heirs and estates after the borrower died, which was usually forbidden by the original agreement but somehow left out of various "refinancing" or other agreements thrown at borrowers desperate to make changes to their payment structure.

Student loan processing companies have faced hundreds of lawsuits and even some criminal prosecutions. Some have been forced out of business, some have had to hide themselves behind new shell companies and change their company names to get away from their terrible reputations. And yet the debts (with all their unfair terms and penalties) live on like relentless zombies.

In the case of the loans forgiven by the government, those are loans originally made by sham "non-profit" shells set up by banks (which is how they qualify for the bankruptcy protection loophole), but were long ago sold off by the banks into the secondary markets, and are now held BY THE GOVERNMENT. And since these loans were protected from risk by government guarantees, the original lenders have long-since gotten their pound of flesh without EVER having been at risk of any loss.

In many cases, the majority of the principal amount (or equivalent) has long since been paid off. What people are paying for, for decades longer, is COMPOUNDED interest, penalties, interest on those penalties that was capitalized, and other made-up fees that sometimes are themselves capitalized and compounded.

Huge amounts of these loans are not debts that will cost the government anything to wipe away -- this isn't requiring money to be paid to some third-party. Fees, penalties, and compounded interest only exist on paper and wiping them away requires only the "cost" of pressing the delete key. Any cost to the government has long since been expended and the only new cost incurred is updating a spreadsheet to reduce a number by $10k.

If there's any loss, it's to the servicing companies who are continuing to take their cut of these unfair loan amounts. Those companies are the equivalent of a mob enforcer goon who is collecting a debt owed to their loanshark boss and is now deprived of their cut. Personally, I won't shed any tears for them.

I get that you might have paid off your loans. So did I -- more than $150k worth. And I get that that experience may make you feel that someone getting some relief is unfair. But that reaction is, at its core, misdirected.

Millions of people can’t afford food, medicine, child care, homes because they fell victim to legally-protected scams and frauds. Their debts are weighing down an entire generation, and making them pay as an exercise in forcing them to learn "responsibility" is only perpetuating the scam.

I know you would have enjoyed relief when you were paying back your loans. But you should be angry at the conmen, not the victims. It's not a matter of somebody getting something for free -- this is a matter of righting a wrong that is hurting our fellow citizens, hobbling our economy, and creating an entire generation that cannot build a life and a family because they're in a form of indentured servitude to a financial system that sees them as cattle to be milked.

Your gut reaction of anger is understandable, but it's ultimately wrong. I hope this helps explain why.