UPDATED 8:04 AM PT – Wednesday, July 27, 2022
President Joe Biden considers forgiving up to $10,000 of student loan debt as a ploy to appeal to young voters. The pandemic pause on student loan repayments will expire August 31 as the President attempts to extend the freeze until the end of 2022 or by next summer.
The Education Department has told loan services not to reach out to borrowers, according to Student Loan Servicing Alliance Executive Director Scott Buchanan. The White House said no decision has been made.
Critics worry this plan will fuel inflation and benefit rich students at the expense of lower income taxpayers. The Federal Reserve Bank of New York estimates student loan forgiveness will cost the nation more than $370 billion.
“So the President’s plan disproportionately would benefit people who are in the upper income group,” stated Sen. Roy Blunt (R-Mo.) while raising concerns over Biden’s proposal. “The top 40 percent of American households hold 60 percent of the student loans. The bottom 40 percent have less than 20 percent of the student loans.”
Progressives argue $10,000 is not enough and are requesting up to $50,000 worth of debt per borrower to be forgiven.