Canadian entrepreneur Kevin O’Leary, also known as Mr. Wonderful from his Shark Tank days, has criticized the student loan bailouts, calling them “un-American” and unfair. Here’s why this successful investor thinks so.
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O’Leary, known for his successful investing career and personal financial advice, has opposed President Joe Biden’s priority on student loan relief. Recently, Biden approved another $7.7 billion for 160,500 borrowers. The Biden-Harris administration has approved $146 billion in student debt relief for four million Americans by adjusting public loan forgiveness and income-driven repayment plans, according to a White House press release. Additionally, this administration plans to launch a more affordable student loan repayment plan to cut student loan payments in half and forgive accrued interest.
This is welcome news for many borrowers, as current data shows that student debt in the U.S. is a whopping $1.727 trillion, with an average federal student loan balance of $37,088. However, not everyone is happy with this news. O’Leary is among those who do not support Biden’s approach to student debt. During an interview with Fox News, O’Leary told host Martha MacCallum, “I’m a taxpayer. I don’t like this.” O’Leary adds, “I don’t think it’s fair, and it’s un-American in the sense that there are a lot of people who have already paid off their student loans.”
O’Leary highlights the unfairness of this debt relief plan, citing people who never went to college because they thought they couldn’t afford it. He also points out that the country is currently experiencing high levels of inflation and that this plan could worsen the problem.
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“There’s no way this isn’t inflationary. This is free money from a helicopter as we try to curb inflation. This just makes it worse.’
The US Federal Reserve has hiked interest rates in an attempt to curb inflation, which rose slightly again in April 2024. Many predict the US central bank will cut interest rates in September, with tepid consumer spending encouraging this. However, O’Leary disagrees and is less optimistic that price levels will fall before the November election. He says, “You can’t solve inflation in four months and three weeks.”
O’Leary also suggests in the interview that if this debt relief plan is politically motivated, it may not be effective. He argues that voters who view the plan as unfair will wonder why these individuals are getting their debts forgiven for a fourth time, while others are not.
“We teach everyone in America, ‘You have to pay back your debts.’ But not you, five million people, for the first time ever, maybe the last, you five million, you’re off the hook.” Once again, O’Leary highlights the unfairness of this scheme, explaining that this is difficult for people who understand the concept of paying back borrowed money to accept. O’Leary suggests this can be especially challenging for those who can’t understand why a select few get a “free ride.”
During the interview, MacCallum plays a clip from the previous election, showing an interaction between Senator Elizabeth Warren and a voter. In the clip, voter tells Warren that his daughter is leaving school without any student loans because he has saved all his money. He wants to know if he will get his money back. When Warren answered no, the voter pointed out the injustice. He explained that the government would pay for people who didn’t save, and those who did would get screwed.
O’Leary agrees: “Where is the free money for people who have actually paid back their loans? They don’t get free money. I hate this. I really, really, really hate this.”
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This article Kevin O’Leary doesn’t believe in a student loan bailout, saying, “This is so un-American. It’s so unfair.” originally appeared on Benzinga.com
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