Student Loan Forgiveness: Biden Administration

The White House is still considering the details of an announcement on student loan forgiveness - and it’s unclear how far President Joe Biden could go on student loan cancellation.

The Washington Post reports that the White House has not settled on the specifics of a plan to forgive most student loans.

 Biden's announcement on the potential for broad-based student loan relief could arrive just before borrowers are required to resume making payments on their federal student loans

on September 1, 2022, the date the pause in those payments expires. More than 40 million people who have taken out student loans are currently waiting for Biden to decide

whether or not to implement a massive student loan forgiveness programme. In that case, what seems to be the holdup?

The Washington Post reports that the Biden administration is taking its time making a decision on whether to forgive large amounts of student debt.

Biden administration needs is the impression that their plans to forgive a large portion of student debt will spur further price increases at a time when inflation has already reached 40-year highs.

Democratic ex-Treasury Secretary Larry Summers has raised concerns that widespread student loan forgiveness would lead to higher prices.

The demand for goods and services could increase and prices could rise if borrowers of student loans had more money to spend.

Congressional Republicans have also voiced concerns that cancelling large numbers of student loans would lead to hyperinflation. 

In contrast, the White House maintains that there will be little to no effect on inflation from providing broad student loan relief.

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