Elizabeth Warren wants to cancel student loan debt. She recently tweeted that President-elect Joe Biden should issue an executive order that cancels up to $50,000 in student loan debt—unilaterally for everybody. Biden said Congress can pass a bill that benefits borrowers, which is absolutely within his legal authority. But just because you can, doesn't mean you should.

If you borrow money to go to college, who do you borrow the money from? You don't borrow it from a bank. Banks are out of the business.

The government took over the student lending business in 2009. It’s made $1.6 trillion in student loans. And all these people have gone to college.

In that time, student lending has more than doubled. So you don't owe money to the bank; you owe money to the government. Which is worse. You can say, "Screw you, I'm not paying you," to the bank. And the bank has to eat it. You can't do that to the government. It doesn't let you off the hook.

I always say one of the first things you should pay off is student loans. That's because they are dangerous. If you don't pay them off, they can follow you around forever. It's really bad. People sign up for these things when they are 18 years old. They borrow $100,000 and have no concept of how big of a number that is.

You're 18 years old, you sign this piece of paper, and you have $100,000 or even $200,000 following you around for the rest of your life. Also, if you don’t pay the full interest on a regular basis, it gets added to the principal. The Consequences of Canceling Student Loan Debt The financial consequence is it all goes on the federal government's balance sheet. It just gets added to the government’s debt. So if we have $27 trillion in debt right now, it turns into $28.6 trillion. You might say, well, that isn't so bad, right? We've spent $27 trillion on other stuff. Why not spend $1.6 trillion on student loans? Here's why… It gets added to the debt. So we're either going to have to issue $1.6 trillion in bonds. Or we'll have to raise $1.6 trillion in taxes. Or a little bit of both.

Rich people can pay for it. No, the math doesn't work. Take all the money of American billionaires and you only get half the problem solved. Everyone's taxes must go up. And, you could tax everyone at 100% and you would barely close the budget deficit. It doesn't work.

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