Student loans are almost always backed a government bank (or a government + public bank) like Fannie Mae or Freddie Mac. The government can set some rules to have loans forgiven (or partially forgiven), such as an amount that has already been repaid (many student loans have paid in more than their principal but the fees and interest extend the loans).
The “dilemma” is that many politicians would rather spend money elsewhere than on helping students. Frequently they prefer to spend money by cutting taxes on certain people and businesses.
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