President Biden during his announcement of a three-part plan to address student debt | The White House/Facebook
President Biden during his announcement of a three-part plan to address student debt | The White House/Facebook
With the national debt now past the $30 trillion mark, President Biden's announcement Wednesday that he will cancel up to $20,000 of student loan debt for certain borrowers has some critics predicting accelerated inflation.
Some economists aren’t convinced the measure will even help those who are shackled by student loans.
The Wall Street Journal Editorial Board wrote that the move was nothing more than "an inflation expansion act" that they expect to be costly.
"That would cost about $300 billion this year, and $330 billion over 10 years, says the Penn Wharton Budget Model. That’s far more than the $102 billion the Inflation Reduction Act purportedly reduces the deficit over 10 years starting in 2027. About 70% of the loan relief would go to borrowers in the top 60% of income distribution," The Wall Street Journal Editorial Board said.
Borrowers who earn an annual income of less than $125,000 will be forgiven up to $10,000 in student loan debt as reported by Fox News. Students who went to college on a Pell Grant will receive up to $20,000 in student loan debt. Furthermore, Biden has extended pandemic-era payment freezes through the end of this December as the nation's federal student loan debt is currently over $1.6 trillion.
Fox News reports more than 43 million Americans have federal student debt. However, the latest federal data shows almost a third owes less than $10,000 and more than half owe less than $20,000.
According to the Education Data Initiative, the average total student loan per state is $29 billion. The Education Data Initiative further reports that $11.8 billion in student loan debt belongs to Nevada residents. Among the state’s indebted student borrowers, 18% owe less than $5,000 and 19% owe an average of $28,614.
President Biden attributed his move to “universal education” not keeping up with the rest of the world and how the price of college has been squarely placed on students for far too long.
“Instead of properly funding public colleges, many states have cut back their support. We were just talking about that in the Oval. Many states have cut back support for their — their state universities, leaving students to pick up more of the tab,” Biden said in his announcement.
On the heels of the student debt relief news, Gov. Steve Sisolak (D-NV) posted on Facebook that he would continue to invest in education.
“When we invest in education, we push Nevada forward. That's why I became the country's first governor to invest federal relief dollars directly in classrooms AND funded education at its highest level in Nevada history!” he wrote.
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