As the case for the Biden Administration’s student debt forgiveness program moves through the Supreme Court, Michael Burry recently tweeted his opinion on the matter, writing it will have “terrible consequences for America,” according to an article in Bloomberg that cites his tweets. Burry posits that the program was constructed “on a foundation of terrible major choices” and that student debt forgiveness wouldn’t solve the issue of student debt and only lead to a rash of tuition hikes.
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The student loan relief plan would forgive up to $20,000 per borrower, with $125,000 and $250,000 income caps for individuals and households, respectively. The case against the plan argues that it is an overreach of presidential power. But tuition rates have skyrocketed in the U.S. over the last few decades; 50 years ago, average student debt was a mere $1,070 while it’s now at more than $31,000—a 2800% jump, the article contends.
Burry, the founder of Scion Asset Management, is well-known for shorting the housing market prior to the 2008 crash. Some of the bold forecasts he’s made on social media lately include that the U.S. is already in a recession and that traders should sell in advance of the Fed’s February meeting, according to Bloomberg. In one of his tweets about the student debt forgiveness plan he claims to have left his medical residency with “well into six figures of educational debt,” though of course it’s doubtful he still carries any debt given the $100 million he made off of his famous short.