Can Bitcoin Solve the American Student Debt Crisis?

Paigambar Mohan Raj
Source: Pexels

US President Joe Biden recently announced a relief program for student and Pell Grant debts. President Biden intends to cancel $10,000 from federal student debt for individuals making under $125,000. Moreover, the American President aims to forgive $20,000 of debt for low and middle-income individuals under the Pell grant program. However, a Bitcoin (BTC) proponent has suggested that the President give students $10k worth of BTC.

Dennis Porter, the CEO of the NPO (non-profit organization) Satoshi Action Fund, thinks that Bitcoin adoption could be a solution to the American student debt problem. Porter suggests that President Biden give each debtor BTC worth $10k and lock the amount for ten years via a smart contract. Porter believes that the BTC, after ten years, would be enough for the students to pay their debts.

However, Porter’s suggestion came with some backlash. Firstly many called out Porter’s suggestion of using smart contracts, which is absent in Bitcoin. Others said that BTC is not the solution to everything. Nonetheless, Porter stood by his opinion. Some could even say that for Porter’s suggestion to work, it would require BTC to grow continuously.

Can Bitcoin solve the student debt crisis?

First and foremost, many criticisms of Porter’s suggestion can be countered. For example, using Bitcoin’s Lighting Network can enable smart contract capabilities.

Moreover, the asset has more than proven itself regarding BTC continuously growing, given its historic rise. Bitcoin has always gone beyond its previous highs. Since 2010, BTC has had an ROI (Return on investment) of over 30,000%, far more than any other asset.

Additionally, if the US President were to make such a move, it would bring in another level of confidence in the asset, thus giving it much more stability.

Nonetheless, there could be instances where such an investment could turn sour. For example, the 2022 crash wiped out 58% of BTC’s value. However, in this case, there are bigger things at play than just the asset. Fiat money and stocks also took a hit in 2022. Inflation numbers are the highest in many decades, and the fuel & energy crisis has hit almost every nation worldwide. However, analysts expect BTC to climb back up. Many predict the next bull run to occur sometime in 2024, and others predict BTC to touch 6-figures very soon.

Giving a certain amount of Bitcoin to students would not only help them pay their debts but would leave something extra for them. This would leave said students financially stable, leading to more entrepreneurial endeavors.

At press time, BTC was trading at $21,710.16, up by 0.9% in the last 24 hours.