"Why is that fair?" Lutnick slams Biden's student loan forgiveness
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Commerce Secretary Howard Lutnick slammed former President Biden's student loan forgiveness plans as unfair to the average American during a sit-down interview with Axios co-founder Mike Allen on "The Axios Show."
Why it matters: The Trump administration blames Biden for the millions of Americans who are facing severe economic consequences and potentially steep declines in their credit scores after student loan delinquencies soared to a five-year high earlier this year.
What they're saying: "Who did he think was going to pay that bill? You, me and every other American with a job should pay the bill? Why is that fair? Why is that reasonable? It wasn't," Lutnick said.
- "The Biden administration created such a weird thing by allowing these people to not pay and giving them sort of a pause or ... they thought they were going to get it free forever."
- Lutnick added that reactivating payment plans is "harder and slower than people imagine."
Context: Biden's attempts to relieve debt for millions of Americans have faced intense scrutiny from a slew of Republican-backed legal challenges.
- After the Supreme Court ruled that Biden's student loan forgiveness plan was unconstitutional in 2023, Biden's administration continued to try to offer forgiveness through other roundabout channels.
- Additionally, conservatives claim Biden confused borrowers by implementing a one-year on-ramp period that prevented servicers from reporting missed payments.
- Representatives for Biden did not immediately respond to Axios' Monday evening request for comment.
The other side: The Biden administration said in 2022 that there could be a "historically large increase" in delinquencies if its signature forgiveness plan was ever stuck down.
- "Unless the [Education Department] is allowed to provide debt relief, we anticipate there could be an historically large increase in the amount of federal student loan delinquency and defaults as a result of the COVID-19 pandemic," a department spokesperson said at the time.
- A Biden Education Department spokesperson said during one of last year's legal battles "the fact remains that this lawsuit reflects an ongoing effort by Republican elected officials who want to prevent millions of their own constituents from getting breathing room on their student loans."
Zoom in: Researchers at the New York Fed found that more than 10% of balances and roughly 6 million borrowers were either past due or in default as of May after the pause ended.
- The report noted that delinquency rates surged to 8% in early 2025 from below 1% during the previous quarter.
- Delinquent borrowers could face huge a huge ding to their credit score, which the researchers said would "increase borrowing costs or seriously limit their access to credit like mortgages and auto loans."
Go deeper: Student loan delinquencies surge as credit reporting restarts
