Biden is canceling up to $10,000 in student loans and $20,000 to Pell grant recipients

“Holy cow,” she said. “Holy cow… I have to report it to my family immediately!”

DC’s Triana Downing said she was in shock. Should I log into my account to see if it really happened?”

Downing expects her debt to drop from $16,000 to $6,000.

But some high-debt borrowers remained disappointed, especially after a group of Democrats in the House and Senate called on Biden to cancel $50,000 in federal student debt.

“It’s hard to get excited,” says Briana Ford of Columbia, South Carolina. She owes about $60,000 in her student loans.

“I won’t give it back, but it’s hard to get excited about it.

Republicans aren’t too thrilled either. They have long opposed broad loan forgiveness.

Rep. Virginia Fox of North Carolina, the top Republican on the House Education Committee, said, “This is a slap in the face of people who never went to college and borrowers who have supported accountability to taxpayers and paid off their loans.” Stated. , in a statement Tuesday night.

Many economists and higher-education experts also opposed the move, arguing that even widespread debt cancellation would not remedy rising college costs.

A May analysis estimated that policies like the one Biden announced would cost at least $230 billion, and that even income limits would “mitigate the policy’s core problems.” but will do little,” he warned. It is regressive, inflationary, costly, and likely to increase rather than reduce the cost of future higher education.”

Will it make inflation worse?

Experts have expressed concern that broad student loan forgiveness will exacerbate inflation, which is already one of Biden’s biggest political weaknesses heading into this fall’s midterm elections.

“Student loan debt relief is spending that drives demand and boosts inflation.” murmured Earlier this week, former U.S. Treasury Secretary Lawrence Summers.

“It consumes resources that could be better used to help people who, for one reason or another, never had the chance to attend college. It also tends to cause inflation by raising tuition.”

Summers’ objections sparked considerable dissent.

“For loan forgiveness to boost inflation, it has to tell a pretty strange story about expectations.” responded Susan Dynalski, an economist and professor at the Harvard Graduate School of Education, said:

“No one has made student loan payments in the last two years. Forgiveness will not increase borrower cash flow so far. It happened when I was

Borrowers have been waiting years for loan forgiveness

The loan forgiveness announcement came more than two years after then-presidential candidate Joe Biden. promise to cancel At least $10,000 in federal student loans. Since then, the pledge has followed the administration. Wednesday’s move comes after the student-loan moratorium has been extended several times and some Democrats have tried to extend forgiveness from the original plan to $50,000.

A June NPR/Ipsos poll found that a majority of the general public (55%) supports forgiving individuals up to $10,000 in federal student loan debt. But the more generous the relief, the narrower the support. Forty-seven percent of all respondents said they supported forgiveness of up to $50,000 of debt, and 41% said they supported a complete wipeout of all borrower conditions.

Not surprisingly, support for debt relief was higher among the borrowers themselves. But when asked to choose between debt forgiveness and dealing with high college costs, the vast majority of borrowers and non-borrowers alike chose to deal with rising college costs. said to be the most important.

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