The Biden administration announced a plan for student debt cancellation on Wednesday, but economists and those normally aligned with the Democratic White House have been voicing their concerns.
Jason Furman, a former Obama administration economist, has been particularly vocal in calling out the faults of Biden’s new plan and has called it “reckless” and dangerous in light of the continuing inflation crisis.
“Pouring roughly half trillion dollars of gasoline on the inflationary fire that is already burning is reckless. Doing it while going well beyond one campaign promise ($10K of student loan relief) and breaking another (all proposals paid for) is even worse,” Furman tweeted.
Pouring roughly half trillion dollars of gasoline on the inflationary fire that is already burning is reckless. Doing it while going well beyond one campaign promise ($10K of student loan relief) and breaking another (all proposals paid for) is even worse.
— Jason Furman (@jasonfurman) August 24, 2022
The administration’s plan directs the Department of Education to provide up to $10,000 in debt cancellation for those who have an individual income of less than $125,000, or $250,000 for married couples, according to the White House fact sheet.
The Department of Education will also cap monthly loan payments, so that individuals are not overextending their finances, as well as reduce the price of college by holding schools accountable for tuition hikes.
On top of that, the administration also plans to repair the Public Service Loan Forgiveness (PSLF) program so that any borrower who worked for a nonprofit, in the military or in any form of federal, state or local government will receive credit toward loan forgiveness.
These steps work towards Biden’s goal of making a “comprehensive effort to address the burden of growing college costs and make the student loan system more manageable for working families,” the fact sheet outlined.
Was Biden’s student loan cancellation legal?
Yes: 0% (0 Votes)
No: 0% (0 Votes)
But while the administration has argued that this will help individuals and, thus, the whole economy, economists have doubts.
In multiple tweets, Furman explained the faults of the…