President Biden’s student loan giveaway would benefit top earners and highly educated grads most and worsen inflation, according to new analyses by the University of Penn Wharton Budget Model and the Committee for a Responsible Federal Budget.
- The Penn-Wharton Budget Model estimates that forgiving federal college student loan debt will cost between $300 billion and $980 billion over the next ten years.
- Most of the debt is held by borrowers in the top 60 percent of income distributions. And 87 percent of Americans don’t have student loans.
- Student loan forgiveness is a giveaway to highly educated college grads. The Committee for a Responsible Federal Budget points out, “…debt cancellation gives a much higher proportion of its benefit to top earners. For example, a report from the University of Chicago showed that the top 10 percent of earners receive more from cancellation than the entire bottom 30 percent of earners.”
Americans are already struggling under record-high inflation. Forgiving $10,000 of student loan debt per person does nothing to bring down inflation, and will only exacerbate the rising cost of higher education rather than address it.
“In the middle of crushing Biden-flation, how could the President justify a student loan giveaway that overlooks Americans hurt most by inflation?” Ways and Means Republican Leader Rep. Kevin Brady (R-TX) warned in a Republican meeting examining student debt forgiveness in July.
President Biden’s Student Loan Giveaway Will Be Paid for At the Expense of Lower-Income Earners.
- Even former Obama-Biden top economic advisor Larry Summers issued a warning that Biden’s mass student loan giveaway will worsen inflation. “Student loan relief is not free. It would be paid for. Part of it would be paid for by the 87 percent of Americans who do not benefit but lose out from inflation,” Summer said.”
- Americans are rightly concerned – at least 59 percent of Americans worry the plan will worsen inflation, according to a new CNBC poll.
Pursuing mass student loan forgiveness ignores the very problems most Americans are facing.
- Workers and families are getting crushed by Biden-Flation – an average family is spending $6,000 more this year to pay for exactly what they bought the past year.
- Rather than prioritizing inflation raging for Americans and Main Street businesses, President Biden’s student loan giveaway puts the economy on the back burner once again.