Fiscal watchdog argues against Biden wiping out student debt

The following is an excerpt from The Hill.

The Committee for a Responsible Federal Budget (CRFB) is pushing against further broad student debt relief as the Biden administration weighs taking action, arguing it could risk undermining a Democratic effort to reduce the deficit and fight inflation.

An analysis released by the fiscal watchdog on Tuesday looked at the fiscal costs that might take place if President Biden extended the pause on federal student loan repayments through the end of the year, as well as previous plans considered by the Biden administration to provide $10,000 in cancellation for some borrowers.

Both actions, the analysis found, would cost roughly $250 billion over the next decade.

“Combined, these policies would consume nearly ten years of deficit reduction from the Inflation Reduction Act,” ...

In its analysis on Tuesday, the CRFB argued student debt cancellation would “wipe out the disinflationary benefits” of the bill and “boost near-term inflation far more than” the economic package “will lower it.”

Democrats are seeking to raise billions in revenue through tax provisions targeting wealthy tax cheats and big companies to reduce the deficit while also offsetting costs for investments in climate and health care.

Republicans have strongly opposed an extension to the moratorium on student loan repayments, as well as Biden’s potential plans to provide $10,000 in debt cancellation for borrowers making under a certain income, calling the proposals “wildly inflationary.

The recent analysis comes as the White House faces pressure over how it will move forward on federal student debt. Without renewal, the moratorium on repayments will end on Aug. 31.

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