https://justthenews.com/politics-policy/education/biden-student-loan-plan-expected-worsen-inflation-benefit-higher-income

Biden student loan plan expected to worsen inflation, benefit higher-income earners

President Biden is expected to cancel $10,000 in federal student loans for all borrowers making less than $125,000 a year — a plan that experts, including prominent Democrat economists, argue will make inflation worse, disproportionately benefit wealthier Americans, and cost taxpayers hundreds of billions of dollars.

Biden's announcement, widely expected to take place Wednesday, is expected to include a short-term extension of the pause on federal student loan interest and repayments originally put in place to provide relief amid the economic fallout caused by COVID-19. The freeze is scheduled to expire on Aug. 31.

This repayment moratorium, along with targeted actions by the Biden administration to cancel some student debt, has already cost the federal government nearly $300 billion since March 2020, according to the Committee for a Responsible Federal Budget, which noted most of these costs are from executive actions under the Biden administration.

Extending the pause to the end of the year would cost an additional $20 billion. Meanwhile, the committee calculated that canceling $10,000 in student loan debt for households making less than $300,000 — or individuals making less than $150,000 — would cost roughly $230 billion.

The University of Pennsylvania's Wharton School, meanwhile, determined in a new study that a "one-time maximum debt forgiveness of $10,000 per borrower will cost around $300 billion for borrowers with incomes less than $125,000." Increasing the maximum amount forgiven to $50,000 per borrower — a proposal supported by many progressives — increases the total cost to as much as $980 billion.

<much more>