At the outset of the COVID pandemic, student loan borrowers were granted a temporary pause on their payments. Since President Biden took office, however, the payment pause has received continuous extensions with seemingly no end in sight. Recently, Biden said he is considering dealing with some student loan debt reduction and expects to decide on full or partial loan forgiveness “in the next couple of weeks”.
First, I’ll point out that the Executive Branch lacks the authority to unilaterally forgive federal student loan debt.
The second point deals with the topic of inflation. As President Biden contemplates student loan relief, inflation is weakening the dollar at a rate of more than 8 percent over the past year, a level not seen in over 40 years. Forgiving even $10,000 in debt per borrower would cost taxpayers roughly $373 billion. This means that the deficit and debt will grow, increasing the incentive for the government to print more money, which decreases the value of the dollar.
Third, student loan forgiveness would disproportionately benefit the wealthy over low-income Americans. Wealthy students are more likely to attend college and thus, more likely to hold student loan debt. Nearly 60 percent of all student loan debt is held by the rich and upper-middle class. So, by forgiving student loan debt, we would be handing the wealthy a financial windfall while low income Americans suffer further from inflation and rising costs.
Party of the rich
Party of hate
