President Biden Tackles Student Loan and Considers $10,000 Debt Reduction Per Borrower

Tags: Currents Media, Student Loan Debt

Currents News Staff

President Joe Biden says he plans to announce his decision on federal student loan relief within the next couple of weeks.

“I am considering dealing with some debt reduction,” the president said.

Members of his own party are asking him to forgive $50,000 dollars per borrower – that could help them in the midterms.

“I am not considering $50,000 debt reduction,” Biden said, “but I’m in the process of taking a hard look at whether or not there are going to be additional debt forgiveness.”

Biden campaigned on forgiving a fifth of that amount and waiving what some students owe for undergraduate studies at public schools. He also campaigned to make community college free.

He hasn’t been able to do those things yet, but he has forgiven more student loan debt than any other president. He’s also allowed borrowers to pause payments without interest during the COVID-19 pandemic.

“There’s been no conclusion of any process internally yet,” said Jen Psaki, White House Press Secretary.

The catch with loan forgiveness is inflation: canceling all federal student debt could increase the inflation rate by .1 – .5 percent over a year. The current proposals wouldn’t go that far. Biden says he’s open to that, but the problem is that Americans are already dealing with high prices.

“You’ve seen the war interrupting all kinds of things — supply chains, creating inflation,” sai Rana Foroohar, CNN Global Economic Analyst & Global Business Columnist & Associate Editor for Financial Times. “That has a knock-on effect for companies. It makes prices higher. Consumers start to feel that.”

The Federal Reserve says it plans to raise interest rates to control inflation. That has some economist worried about a recession.