Michael Burry warns of student loans forgiveness consequences

Hedge fund boss Michael Burry is warning of “terrible consequences” for the US if the Biden administration’s student loan debt forgiveness plan is upheld.

Burry, whose successful bet against subprime mortgages were famously chronicled in the 2015 film “The Big Short,” delivered the dire forecast as the Supreme Court hears arguments this week on whether President Biden has the authority to cancel student debt.

“Let’s not forget that the student debt problem is built on a foundation of terrible major choices,” Burry, 51, tweeted on Tuesday.

“Bailing generations out of those bad choices will mean more bad choices, tuition hikes, and terrible consequences for America,” he added.

Aside from potential increases to the cost of education, Burry did not elaborate on what “terrible consequences” he foresees for the country.

Burry followed up his warning by detailing his own experience with student debt.

The Scion Asset Management founder studied at UCLA and earned his medical degree at Vanderbilt University before starting — and eventually abandoning — a residency at Stanford University Medical Center.

“When I left residency at Stanford to gamble my future on what was to become, I had well into six figures of educational debt,” Burry tweeted Wednesday. “I was damned sure I was going to pay it off.”

Burry has amassed more than 1.4 million followers on Twitter, where he frequently tweets — and then deletes — his predictions about the US economy. He has warned a severe recession on several occasions over the last year.

Under Biden’s plan, the federal government would forgive up to $20,000 in student loans per borrower, depending on their income-based eligibility.

The conservative-majority Supreme Court appeared skeptical of Biden’s plan during hearings this week, raising doubts about the likelihood it will receive final approval.

Justice Brett Kavanaugh suggested it was “problematic” that Biden took executive action even though Congress has not passed legislation related to student debt.

The president and supporters of his plan argue student loan debt forgiveness will provide much-needed relief to million debt-saddled Americans.

But critics have aired various concerns about Biden’s plan, such as whether his executive order oversteps the president’s authority.

Some detractors have suggested that a cancellation of student debt would further fuel inflation that hit its highest level in decades last year.

Others say the plan is too costly and burdensome on taxpayers. Last year, the nonpartisan Committee for a Responsible Federal Budget found the plan “will likely cost an astronomical $400-$600 billion” over time.

With Post wires