‘The Big Short' investor Michael Burry believes the student debt problem itself has been built on bad choices and bailing out would mean making even more bad choices.
"Let's not forget that the student debt problem is built on a foundation of terrible major choices. Bailing generations out of those bad choices will mean more bad choices, tuition hikes, and terrible consequences for America," Burry tweeted.
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The prominent investor's comments come in the backdrop of a historical case that is being heard by the Supreme Court.
President Joe Biden announced his plan last August to cancel $10,000 in federal student loan debt for Americans earning less than $125,000 or households earning less than $250,000. In addition, Pell Grant recipients would be eligible for an additional $10,000 in student debt forgiveness.
The Congressional Budget Office estimates the program would cost taxpayers $400 billion over 10 years.
Six Republican-dominated states — Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina — and two individuals have sued to stop the plan.
The Hearing: The Supreme Court's conservative majority appeared to be deeply skeptical on Tuesday of the legality of the Biden administration's plan to forgive over $400 billion in student debt, reported The New York Times.
Chief Justice John G. Roberts Jr. indicated the administration had acted without sufficiently explicit congressional authorization, thereby violating separation-of-powers principles, the report said.
The justices will now cast tentative votes at a private conference in the coming days, the report added.
Stocks that are linked to student loans like SoFi Technologies Inc SOFI, Navient Corp NAVI, Maximus Inc MMS and SLM Corp SLM traded mixed on Tuesday.
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