Canadian business owner Kevin O’Leary, also known as Mr. Wonderful from his Shark Tank days, has criticized student loan bailouts, calling them “un-American” and unfair. Here’s why this successful investor thinks so.
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O’Leary, well-known for his successful investment career and personal finance advice, has voiced opposition to President Joe Biden‘s prioritization of student loan relief. Just recently, Biden approved an additional $7.7 billion for 160,500 borrowers. According to a news release from the White House, the Biden-Harris Administration has approved $146 billion in student debt relief for four million Americans by adjusting the Public Service Loan Forgiveness and Income-Driven Repayment plans. Additionally, this administration plans to launch a more affordable student loan repayment plan to halve undergraduate loan payments and cancel runaway interest.
This is welcomed news for many borrowers, given that current data shows student debt in the U.S. amounts to a staggering $1.727 trillion, with an average federal student loan balance of $37,088. However, not everyone welcomes 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 many people that already paid back their student loans.”
O’Leary highlights the unfairness of this debt relief plan, citing people who never attended college because they believed they could not afford it. He also points out that the country is currently grappling with high inflation levels and that this plan may exacerbate the issue.
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“There’s no way this isn’t inflationary. This is free money from a helicopter when we’re trying to tame inflation. This just makes it worse.”
The U.S. Federal Reserve has implemented interest rate hikes to try to curb inflation, which rose slightly again in April 2024. Many predict that the U.S. 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 drop before the November elections, saying, “You can’t fix 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 perceive the plan as unfair will question why these individuals have their debt cleared for the fourth time, while others do not.
“We teach everybody in America: ‘You got to pay your 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.” Again, O’Leary emphasizes the unfairness of this plan and explains that for people who understand the concept of repaying borrowed money, this is difficult concept to accept. O’Leary suggests that this may be particularly challenging for those who cannot comprehend why a select few receive a ‘free ride.’
During the interview, MacCallum plays a clip from the previous elections showing an interaction between Sen. Elizabeth Warren and a voter. In the clip, the voter informs Warren his daughter is leaving school without student loans as 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 save get screwed.
O’Leary agrees, “Where’s the free money for people that 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 Does Not Believe In A Bailout For Student Loans, Saying, “This Is So Un-American. It’s So Unfair.” originally appeared on Benzinga.com
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