WASHINGTON (CBSMiami/AP) — Federal student loan debt could be canceled. President Joe Biden said he’s “taking a hard look” at the issue will reach a decision within a month.
Imagine what student loan forgiveness would mean for you or your family members. Americans have an estimated $1.6 trillion in such debt.
However, experts say canceling all of that debt could increase inflation.
Members of his own party are asking him to forgive $50,000 per borrower. He says he won’t do that, but did not give a number for what he was considering.
During his campaign, Biden said he wanted to “immediately cancel” at least $10,000 in student debt per person. So far he’s repeatedly extended a pause on requiring borrowers to repay their loans, a moratorium that was put in place under then-President Donald Trump near the beginning of the COVID-19 pandemic.
Although activists have been encouraged by their increasing traction on this issue, some said they were concerned that Biden wouldn’t go far enough.
“President Biden, we agree that we shouldn’t cancel $50,000 in student loan debt. We should cancel all of it,” said Wisdom Cole, national director of the NAACP Youth & College Division. “$50,000 was just the bottom line.”
White House press secretary Jen Psaki said Thursday that Biden was still considering whether to tie debt relief to borrowers’ income levels, an idea he’s floated in the past. She said it’s “certainly something he would be looking at.”
She rejected criticism from Sen. Mitt Romney, R-Utah, and others that debt relief amounts to a political giveaway.
Biden’s goal, Psaki said, is to “continue to provide relief to people who need it most, to help people get some extra breathing room.”
The catch with loan forgiveness is inflation.
Canceling all federal student debt could increase the inflation rate by 0.1% to 0.5% over a year.