Yahoo Finance Kevin O’Leary blasts Biden’s student loan forgiveness program, calling it ‘free money from a helicopter’
President Joe Biden continues to prioritize student loan relief, recently approving an additional $7.7 billion for 160,500 borrowers. To date, the Biden-Harris administration reports it has authorized $167 billion in relief for 4.75 million borrowers across the United States.
While the relief comes as good news for borrowers, not everyone supports his approach.
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“Shark Tank” investor Kevin O’Leary for one believes that Biden’s student loan relief is unfair.
“This is so un-American. It's so unfair,” O’Leary said in a recent interview with Fox News.
To illustrate that unfairness, O’Leary points to Americans who’ve already repaid their loans, future students who won’t be entitled to relief and those who never attended college because they believed they couldn't afford it.
‘Free money from a helicopter’
O’Leary also believes that student loan relief will only worsen the inflation the Fed has been struggling to cool.
“There's no way this isn't inflationary,” he stated. “This is free money from a helicopter when we're trying to tame inflation. This just makes it worse.”
The U.S. Federal Reserve has implemented aggressive interest rate hikes to curb inflation. However, the prices of many necessities remain elevated. For example, since the beginning of 2020, the index for food prices has risen by 25%, and the shelter index has increased by 23%, according to data from the Bureau of Labor Statistics.
O’Leary isn’t optimistic that price levels will cool down before the U.S. presidential election this November.
“You can't fix inflation in four months and three weeks,” he said.
He also criticized two of Biden’s notable pieces of legislation, stating, “The Inflation Reduction Act has proven to be inflationary. [The] Chips and Science Act is billions and billions of dollars out of a helicopter for free. That's all inflationary.”
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‘I really, really, really hate this’
O'Leary argued that the current approach to student loan relief contradicts long-standing values of fiscal responsibility.
“It's so inconsistent with the values we've made people for over 100 years understand,” he said. “We try to teach fiscal responsibility in high school, and what are we telling people now? ‘Don't worry about it, borrow all the money you want for college — it's free, you don't have to pay it back.’”
In other words, he believes that student loan relief promotes the idea that people can borrow freely for college without needing to repay, thereby undermining the teaching of financial responsibility to students.
O’Leary also questioned why those who have already paid back their loans don’t receive similar benefits, expressing strong disapproval of the policy.
“Where's the free money for people that actually paid back their loans? They don't get free money. I hate this. I really, really, really hate this,” he remarked.
The Biden administration has previously addressed accusations of unfairness.
“I don’t see it as unfair. I see it as we’re fixing something that’s broken,” Education Secretary Miguel Cardona stated in April, when testifying about the Education Department’s budget request for next year.
“We have better repayment plans now so we don’t have to be in the business of forgiving loans in the future,” Cardona added.
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