SoFi CEO calls on Biden administration to clear $10,000 for borrowers

For Anthony Noto, CEO of SoFi, the topic of excessive student debt is personal and goes far beyond the fact that he is CEO of a fintech company that refinances student loans.

“My younger brother Tommy passed away in 2018, and it was a very traumatic experience for us as a family. My older brother and I searched through his belongings in his apartment a few days after his death. On his desk was a letter from Mohela, I opened this 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 and did well professionally,” Noto said on Yahoo Finance Live. “There are a lot of Americans who have done everything they can achieve similar success, and they still have that economic burden.”

Noto took the Biden administration to task this week in a new blog post for “dithering” on the issue of student debt forgiveness. Student loan repayments are set to resume on May 1 after being frozen again in 2021 due to the effects of the pandemic.

But the chatter in DC is that the deferment period will once again be extended as the Biden administration continues to work on a plan to deal with crippling student debt levels.

SoFi CEO Anthony Noto looks on prior to the game between the Los Angeles Rams and New Orleans Saints at the Los Angeles Memorial Coliseum on September 15, 2019 in Los Angeles, California. (Photo by Sean M. Haffey/Getty Images)

Noto thinks $10,000 in student debt should be erased and repayment started again for those who have the financial means to repay.

“It’s classic leadership by indecision,” says the former US Army captain. “That’s not exactly what the country needs. The American people deserve better. We need decisive leadership. We need the administration to take a stand.

Certainly, the student loan crisis remains exactly that, a crisis that is preventing many people from owning homes or leading normal lives.

About 43 million people in the United States carry an estimated $1.5 trillion in federal student debt and $119 billion in private student loans, notes personal finance website The Balance.

Former FDIC Chairperson Sheila Bair agrees with Noto that stronger action needs to be taken.

“Of the options for providing some level of loan forgiveness, the most compelling is the amount of $10,000. Indeed, debt forgiveness at this level would be life changing for almost half of all borrowers, eliminating any federal student debt by 12.8 million and slashing halved for another 7.7 million,” Bair said in an exclusive Yahoo Finance op-ed.

Brian Sozzi is editor-in-chief and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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