Are Federal Student Loans Even “Loans?” From Forbearance to Forgiveness to Taxpayer Expense. Fairer: Allow Bankruptcy | Wolf Street

Federal student loans account for about $1.3 trillion of this $1.59 trillion in total student loans, according to a separate report from the New York Fed. The remainder are Family Federal Education Loans (FFEL) owned by commercial banks, and private loans.

It’s the $1.3 trillion in federal loans that were all moved into forever-forbearance in the spring of 2020, and that are now up for forgiveness.

In addition to the list of existing student loan forgiveness programs – Public Service Loan Forgiveness, Teacher Loan Forgiveness, Closed School Discharge, and others – there is now the forgiveness when students feel that the educational-industrial complex screwed them.

And the biggie, a general forgiveness program is currently being hashed out by the administration. The proposal started out with $10,000 in forgiveness per borrower. But this stinginess of the taxpayers is leaving a lot of voters deeply frustrated, and the anger is boiling over, putting politicians under pressure to buy more votes, or re-buy the same votes, by raising the forgiveness amount to $50,000, maybe with income caps.

Are Federal Student Loans Even “Loans?” From Forbearance to Forgiveness to Taxpayer Expense. Fairer: Allow Bankruptcy | Wolf Street