Since taking office in January 2021, President Joe Biden has repeatedly pushed back payment deadlines for individuals who took out student loans. With pressure from his left, with Democratic Senators Bernie Sanders and Elizabeth Warren leading the way, Biden could force taxpayers to foot the ultimate bill for the loans under the guise of "forgiveness." He's expected to do so on Wednesday.
Cancel student debt. All of it.
— Bernie Sanders (@BernieSanders) April 5, 2022
But Obama National Economic Council Director Larry Summers is warning the move will make inflation worse. Summers also warned Biden's American Rescue Plan would drive inflation exponentially when it was passed solely by Democrats in March 2021. Those warnings were ignoring and inflation currently sits at 8.5%.
I hope the Administration does not contribute to inflation macro economically by offering unreasonably generous student loan relief or micro economically by encouraging college tuition increases.
— Lawrence H. Summers (@LHSummers) August 22, 2022
Not to mention, student loan "forgiveness" moves the payment burden from wealthy degree holders to the non-college educated working class. They're also concerned about inflation.
NEW: As Biden weighs a student debt decision, Penn Wharton Budget Model has released its analysis of student loan forgiveness, estimating it will cost bet. $300-$980 billion, w/majority of relief going toward borrowers in top 60% of earners. More on the @TheTerminal.
— Nancy Cook (@nancook) August 23, 2022
59% of Americans worry (correctly) that a student debt bailout (which mostly helps the wealthy) would add to inflation.
— Matt Whitlock (@mattdizwhitlock) August 22, 2022
??Only 32% say all debt should be bailed out
??64% say either nothing should be forgiven, or it should ONLY go to people who need it.https://t.co/FbSiLSJldG