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Posted on 03/14/2026 11:37:24 AM PDT by Bullish
My solution is simple and market based – make colleges co-sign or share default risk on any federally backed loan
The Eighth Circuit Court of Appeals just slammed the door on the Biden era’s SAVE student loan repayment plan. On Monday the court told a district judge to approve the Trump administration’s settlement with Missouri and kill the program for good. More than seven million borrowers who had been coasting in forbearance for a year and a half now face the music. They will have to switch to one of the old repayment options or start writing real checks. It is about time.
I have spent thirty years in financial services running hedge funds, private equity vehicles, and as an outsourced investment office for ultra-high-net-worth families. I have stress-tested balance sheets that would make most politicians faint. One lesson never changes. When adults sign contracts, they are expected to honor them. That used to be common sense. The SAVE plan treated it like optional advice.
Under SAVE, borrowers paid as little as five percent of discretionary income, with forgiveness after ten or twenty-five years depending on the degree. The Biden administration sold it as compassion. What it really was amounted to was a slow-motion transfer of private debt onto the public ledger. Lenders extended credit because borrowers swore they could repay. Then the government stepped in, paused payments, and dangled mass forgiveness. That is not relief. That is a bait-and-switch that rewards the borrower, stiffs the lender, and sticks the taxpayer with the tab.
Think about the math the way any CIO does. Total federal student debt sits north of one-point-seven trillion dollars. The original Biden forgiveness attempt carried a four-hundred-billion-dollar price tag before courts stopped it. SAVE was the backup plan, designed to achieve roughly the same outcome through the back door. Every dollar forgiven had to come from somewhere. That somewhere is the same pool of revenue that funds national defense, infrastructure, and the interest on the thirty-six-trillion-dollar federal debt I warned about in my fiscal reform papers. In plain English, working families who never went to college or paid their own way are subsidizing someone else’s art-history degree.
The borrowers were legal adults when they signed the promissory notes. They were handed disclosures, interest-rate projections, and repayment calculators. Many chose fields with dismal earnings prospects. That was their call. In my house we told our three sons the same thing my father told me. Choices have consequences. My oldest graduated West Point and understands duty. The younger two are grinding through college right now and they are both working while attending school. Contrast that with the millions who treated a degree like a participation trophy and then demanded the government tear up the bill.
Dry humor aside, this is not funny for the responsible majority. Picture Gordon Gekko in Wall Street screaming about greed, except the greed here belongs to the borrower who wants a luxury credential without the bill. Or Tony Soprano shaking down the neighborhood while insisting the rest of us pay protection money so he can keep his lifestyle. Same principle. The SAVE crowd wanted the upside of a college education without the downside of the debt they voluntarily incurred. Biden’s delays and forgiveness attempts simply taught an entire generation that contracts are suggestions if enough people whine loud enough.
The real scandal sits on the supply side too. Universities jacked tuition because easy federal loans created artificial demand. They kept adding grievance-studies departments and luxury dorms while grads defaulted at alarming rates. No skin in the game for the schools. My solution is simple and market based. Make colleges co-sign or share default risk on any federally backed loan. Watch how fast worthless programs disappear. Limit federal guarantees to high-return fields like engineering, nursing, and trades. Push vocational paths the way we once pushed apprenticeships. Practical skills build discipline. Gender-studies seminars build debt.
We also need to restore the cultural expectation of personal responsibility. Reagan reminded us that the nine most terrifying words in the English language are “I’m from the government and I’m here to help.” The SAVE plan proved him right. It created moral hazard on a national scale. Borrowers learned they could defer reality. Lenders learned the rules could change overnight. Taxpayers learned they are the ultimate bag holders.
The fix is straightforward. End all future forgiveness schemes. Require borrowers to begin repayment immediately after grace periods expire. Offer private-sector income-share agreements for those who truly need flexibility, but with real market pricing and no taxpayer backstop. Encourage states to experiment with the laboratories-of-democracy model the Founders intended. Red states already show lower tuition growth and stronger job placement because they never bought the federal blank check.
Seven million people are about to feel the sting of reality. Some will tighten belts and pay. Others will complain louder. The rest of us should stand firm. Discipline and integrity built this country. Handouts and excuses erode it. America just chose accountability over another round of socialist fantasy. That is not cruelty. That is the forged resilience that turns boys into men and keeps a republic solvent.
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Turn them over to collection agencies-just for effect.
Forgiving these loans is legalized theft. It’s like kleptomania.
This will naturally remove virtually all of the “… studies” majors.
Take the losses the College may accrue out of the faculty retirement funding.
make the colleges do the loans.
The loan does not accumulate interest. There is the loan amount plus a set fee.
Then after graduation, a percentage of the paycheck is automatically sent to the colleges to repay the loan. Works like garnishment.
If the student has a good paying job, the loan will be paid off quickly. If the student has a degree in underwater basket weaving, paying off the loan may take decades.
Guess who got hurt the most by these out of control willy-nilly student loans? That’s right, low income folks, especially minorities that should really have taken up vocational training instead of pursuing useless college degrees. Democrat do-gooder progressives trapped people into loans for useless studies that now they cannot repay. Progressives never think things through to the end. They’re always paving the road to ruin with ‘good intentions’.
What it also amounted to was a massive subsidization of communist indoctrination learing centers that used to actually educate young men and women.
Make it dischargeable in bankruptcy. This will cause increased lender discipline. And as the writer said, get the colleges on the hook.
You’ll see loans continue for the right fields. And those kids won’t use bankruptcy because of the kinds of jobs they want, clearances etc.... Engineers, Finance, etc.
The Women’s studies and such will see loans dry up.
That should be implemented just for the entertainment value of the interdepartmental fights. I want to see the grievance studies department trying to justify that their graduates are just as employable as engineering or business graduates.
“My solution is to get government out of education. Not even government backed loans. “
The ultimate correct answer. Tuition is insane and unjustified.
And these damned kids. Whadda they think? They are a Tech Bro? A Ukrainian? An Israeli?
Shaddup and pay your bill. No freebees for you!
“What it really was amounted to was a slow-motion transfer of private debt onto the public ledger.”
Who they think they are? That’s only for too big to fail banksters....
Before there was Minnesota Learing Centers and blatant Medicaid fraud, there was equally brazen and blatant student loan fraud to pave the way.
The Obama era student loan fraud was off the charts and many of the features of the Democrats grifts like multiple shell companies, no show and nonexistent phantom students, fake fly by night institutions of higher learing and intentional strategic disregard for blatant criminality by the political and program administrators that we are now seeing exposed in Minnesota were pioneered and put into place by the Obama Administration's plan to turn student loan program into a Democrat piggy bank
The Democrats irrational desperation to push the Student Loan Forgiveness is driven, at least in part, to take these fraudulent student loans off the books before DOGE and FBI/DOJ investigators get hold of the records and expose the fraud.
It's really no different than SNAP and EBT benefits that are designed to subsidize food producers and grocery store chains.
Or a $950B+ Department of Defense budget designed to subsidize the defense contractors who employ the likes of Lindsey Graham as their cheap whores.
“Everything (p)resident autopen foisted on America should be summarily canceled and his entire regime should be arrested.”
Way back when, Joe was the congressman who eliminated bankruptcy for these loans. It all started out because Joe was paying off his banking donors.
“Everything (p)resident autopen foisted on America should be summarily canceled and his entire regime should be arrested.”
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According to the current Department of Education, these are the loan forgiveness programs still in operation:
“Key 2026 Student Loan Forgiveness Status:
Public Service Loan Forgiveness (PSLF): Remains active for government/nonprofit employees after 10 years of payments. New regulations in 2025/2026 have refined the program.
Income-Driven Repayment (IDR) Plans:
IDR forgiveness (under plans like IBR or ICR) for remaining balances after 20–25 years of payments is active.
SAVE Plan Ended: As of March 2026, the SAVE plan was ruled illegal, and borrowers are being moved to other repayment options.
Other Forgiveness Options: Available for borrowers with permanent disabilities (Total and Permanent Disability discharge) or those defrauded by their school (Borrower Defense).
For up-to-date information, borrowers should check studentaid.gov directly, as regulations and legal challenges continue to evolve.”
Please tell us more humble author.
“Guess who got hurt the most by these out of control willy-nilly student loans? That’s right, low income folks, espe”
I paid off both my kids student loans and a nephew. Of course they didn’t tell me about taking the loans until they got in trouble. I didn’t want them starting life with a bad credit rating.
I was SO STUPID. When my community burned and I was homeless I never heard a word from anyone.
An alternative would see borrowers do community service that is now being paid for by the taxpayers. You have student loan debt that got you a medical license? Spend your Saturdays at a VA hospital. You have student loan debt that got you a teaching credential? Teach a night class. The possibilities are endless.
My solution is simple and market based – make colleges co-sign or share default risk on any federally backed loan>>> Better let them create their won loan system. Many univerities have large endowments. If they assume the risk they will have to teach real stuff again. Like redin ritin and rithmetik.
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