A nonpartisan watchdog group on Tuesday argued that President Joe Biden's administration should scale back its plans for wide-ranging student debt relief saying it could hamper efforts to reduce inflation.
The Department of Education announced this week that it will cancel almost $4 billion in student loan debt for ITT Technical Institute students. This comes as part of the Biden administration's ongoing efforts to forgive student loan debt, having canceled almost $32 billion in student loans since Biden took office.
In an analysis released Tuesday, the Committee for a Responsible Federal Budget wrote that "across-the-board student debt cancellation could undermine the [Inflation Reduction Act's] disinflationary gains and deficit reduction."
The organization notes, "Simply extending the current repayment pause through the end of the year would cost $20 billion — equivalent to the total deficit reduction from the first six years of the IRA, by our rough estimates. Canceling $10,000 per person of student debt for households making below $300,000 a year would cost roughly $230 billion. Combined, these policies would consume nearly ten years of deficit reduction from the Inflation Reduction Act."
The analysis concludes, "Broad student debt cancellation — whether by extending the pause, forgiving balances, or both — would undermine the benefits of the IRA and demonstrate a lack of seriousness in addressing our nation's economic challenges."