More than half a million people have signed on to a Change.org petition urging President Trump to sign an executive order to cancel all student loans held by the federal government, or roughly 85% of all student debt.
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Alan Collinge, the creator of the petition and founder of StudentLoanJustice.org, believes that the order would be the least expensive, and most expedient way to inject trillions into the economy, which continues to be slammed by the coronavirus pandemic.
"If you're talking about fiscal stimulus, this is the lowest hanging fruit on the tree, and there's no better opportunity for the president to stand up to big government and drain the swamp," Collinge told FOX Business.
The petition notes that there are 55 million borrowers and co-signers struggling under $1.8 trillion in debt, with over $100 billion in interest alone being sucked out of the economy every year. In addition, former Chief Operating Officer for the Office of Federal Student Aid, Wayne Johnson, told Fox News' Tucker Carlson in November 2019 that 80% of all borrowers will never be able to pay back their loans.
Analysts from the Levy Institute have predicted that canceling student loans could increase GDP by an average of $86 billion to $108 billion per year, but Collinge said that the benefit of student debt cancellation would be even greater than that.
"That analysis that they did is massively undercounting the true stimulus because that study does not take into account the increased borrowing capacity that canceling these loans would free up," Collinge said. "It's probably closer to double that when you take into account the increased borrowing and spending that would occur."
While many former Democratic presidential candidates like Sen. Bernie Sanders of Vermont and Sen. Elizabeth Warren of Massachusetts have proposed plans for student debt cancellation, Collinge says that their effort will just hurt taxpayers even more than they already have been.
"They've been calling on Congress to pass a law that raises one to two trillion dollars in order to "pay for this loan cancelation." But, you know, that's really a big government hustle," Collinge said. "You know, the taxpayers paid for these loans many years ago, and they don't need to pay twice. I mean, that's just ridiculous."
Collinge said he expects the move to face opposition from "bureaucrats, lobbyists, and other defenders of the lending system in and around the Department of Education," but ultimately believes that "40 million citizens who are being crushed under the weight of these predatory loans will cheer, and the economy will flourish."
"I can only hope that the result of this is, quite frankly, the end of the lending program and the replacement of it with a far more rational, rationally priced lending system where the colleges don't have carte blanche to basically treat students as ATM machines," he added.
President Trump previously signed an executive order in August which will extend the suspension of federal student loan payments and sets interest rates to 0% through Dec. 31, 2020. The current student loan relief programs were set to expire on Sept. 30.GET FOX BUSINESS ON THE GO BY CLICKING HERE