We’re already 30% of the way to Biden’s $10,000 forgiveness dream.
More regressive benefits...
There are a variety of reasons why this is a bad idea. First, it amounts to a regressive tax. Wealthier individuals (or those that have a greater prospect to be wealthier) take out large loans for expensive medical and law degrees. These will be the people who benefit most from this payment and interest "freeze". Meanwhile, money not being paid back to the government must come from elsewhere and that's basically anyone who is paying taxes.
It's also immoral and teaches bad values. Presumably anyone taking out a student loan knows the terms and agrees to those terms. It's hardly reasonable then to ask the average taxpayer to pick up the bill instead. This is especially infuriating to families and students that worked extremely hard to scrape together the cost of college without resorting to a student loan.
Incidentally, Federal student loans are not high interest either in absolute terms or when compared to other non-secured loans. The interest rate averages between 4 and 5 percent. Given government policy, it seems like the smart thing to do if you are going to college is to take out a student loan whether you need to or not. Given the way government policy is leaning, the chances are good that your repayment will be reduced, deferred or eliminated and who doesn't like free money?
