On Friday’s “PBS NewsHour,” Senior Vice President and Senior Policy Director at the Committee for a Responsible Federal Budget Marc Goldwein stated that student loan forgiveness would “add probably half a point to the inflation rate.” And ultimately, student loan debt levels will go right back to where they are in just three years.
Goldwein said, “Well, look, if we’re going to fix the student loan system, we should fix the student loan system. Doing something by executive order that just wipes out the debt isn’t going to do much of anything. We’ve estimated debt will be right back where it was in just three years’ time. The income-driven repayment system right now isn’t perfect. There [are] too many different programs. People don’t understand how they work. There’s tough calculation. But there’s also, we haven’t gone to completion with most of them. Because they’re pretty new. So, we should be working with Congress and the president together to try to unify these systems. President Trump and President Obama both had very similar — thematically similar proposals to do just that.”
He added, “Right now, we have an extremely overheated economy, where consumption is already well in excess of what we can produce. So anything we do that gets people to spend more now, as opposed to putting it to pay down their debt or save, is actually going to make that inflation worse. We’ve estimated full debt cancellation would add probably half a point to the inflation rate.”
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