For SoFi CEO Anthony Noto, the topic of excessive student loan debt is personal and runs far deeper than him being CEO of a fintech company that refinances student loans.
“My younger brother Tommy died in 2018, and it was a very traumatic experience for us as a family. My older brother and I were going through his belongings in his apartment a couple days after he passed away. On his desk was a letter from Mohela. I opened up that letter [from] a 47-year-old man who had been incredibly successful professionally, and he owed $44,000 in student loans and he was 47 years old and had done well professionally,” Noto said on Yahoo Finance Live. “There are many Americans that have done everything they can to achieve similar success, and they still have this economic burden.”
Noto took the Biden administration to task this week in a new blog post for “waffling” on the student debt forgiveness issue. Student loan repayments are slated to kick back in on May 1 after being frozen again in 2021 due to the effects of the pandemic.
But chatter in DC is that the deferment period will be extended yet again as the Biden administration continues to work on a plan to address crippling student debt levels.
Noto thinks $10,000 of student debt should be wiped clean and repayment restarts for those with the financial means to repay.
“This is classic leadership by indecision,” the former U.S. Army captain says. “It’s exactly not what the country needs. The American people deserve better. We need decisive leadership. We need the administration to take a stand. Kicking the can down the road is not currently going to suit all the needs of the America people.”
To be sure, the student loan crisis remains just that, a crisis that is preventing many from owning a home or living any form of normal life.
About 43 million people in the U.S. are carrying an estimated $1.5 trillion in federal loan student debt and $119 billion in private student loans, notes personal finance website The Balance.
Former FDIC Chair Sheila Bair agrees with Noto that stronger action needs to be taken.
“Of the options to provide some level of loan forgiveness, the most compelling is the $10,000 amount. Indeed, debt forgiveness at that level would be life changing for almost half of all borrowers, wiping out all federal student debt for 12.8 million people and cutting it in half for an additional 7.7 million,” Bair said in an exclusive Yahoo Finance op-ed.