CNN’s Romans: Biden Loan Plan Is a Transfer with ‘Taxpayers Paying Off All This Student Debt’ While Failing to Solve Core Problem

On Friday’s “CNN News Central,” CNN Chief Business Correspondent Christine Romans discussed President Joe Biden’s student loan plan that was struck down by the Supreme Court and noted that the plan was really “taxpayers paying off all this student debt, but not addressing the core problem.”

Romans said, “This would have been significant relief, when you think of 44 million Americans with this student loan debt. And the typical student loan forgiveness was going to be $10,000, about half of borrowers have 20,000 or less. So, that would have been a real big relief for so many people. But, from the very beginning, there was also the discussion that it didn’t do anything to address the root cause here, which is inflation in the cost of higher education, right? So, this would have been paying off a bunch of student debt, taxpayers paying off all this student debt, but not addressing the core problem. So, that’s someplace where the White House and higher education can really try to fix the core — the root of that problem.”

She continued, “When you look at this as well, I think it’s really important for people to understand that, October 1, those student loan payments resume, and this was going to happen one way or another. The pause, the timeout is done. The three-year COVID timeout is done, and people are going to start to pay, on average, between about $200 to $315 is the average student loan payment, and those are going to start going out the door again. Interest begins accruing again in September. So, this is a really important budgeting moment for millions of families who have been using that money for other things, to pay down other debts, to pay for their housing costs, to pay for their car loan, to spend in the broader economy. So, we’ll be watching very closely to see if this is something that maybe takes a little wind out of consumer spending, because you’re going to have millions of people who are now going to be using their money to pay for their student loan payments, instead of using it elsewhere in the economy.”

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