January 1, Biden’s Plan to Cancel Student Loan Debt Will Have “Enormous Consequences”

Experts are sounding the alarm over President Joe Biden’s plan to cancel student loan debt, warning that it could lead to “tremendous consequences.”

“[A sweeping cancellation of student loan debt] will produce the most inflation,” said former Congressional Budget Office Director Douglas Holtz-Eaken. “If you forgive some of the debt, that’ll create a little more inflation. The least inflationary thing to do is to have people actually go back to paying their bills. That would take care of it.” 

Economist Nicholas Eberstadt said that “waving a magic wand… would have enormous unintended consequences.”

According to the current director of the Congressional Budget Office Phillip Swagel, widespread student debt cancelation has created a gap between those who’ve paid off their student loans, those who didn’t take out student loans, and those who didn’t go to college.

“These sort of apparent horizontal inequities is probably an unintended consequence,” Swagel said. “Different people are being treated differently in ways that might be difficult to explain.” 

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Consequences of Biden’s plan to cancel student loan debt, according to experts: ‘Enormous consequences’