Economists: Biden Debt Forgiveness Could Send Tuition Through The Roof
Some economists believe President Joe Biden’s plan to forgive student debt could cause the cost of a college education to climb, according to Fox Business Network.
Biden announced that those earning up to $125,000 a year would have $10,000 in student debt forgiven, with Pell Grant recipients having up to $20,000 forgiven, Fox Business Network reported.
“Students will likely feel liberated to borrow more money on the assumption of future loan forgiveness, and universities will take advantage of the additional borrowing by raising tuition,” Brian Riedl of the Manhattan Institute told Fox Business Network. “This is pretty similar to the fact that historically, 60% of all student aid increases have been captured with tuition hikes, and this will be treated like an increase in student aid moving forward, which suggests that 60% will be countered by tuition hikes.”
Research by the Federal Reserve Bank of New York indicated that tuition went up 60% for subsidized loans and 15% for unsubsidized loans.
Student loan debt relief is spending that raises demand and increases inflation. It consumes resources that could be better used helping those who did not, for whatever reason, have the chance to attend college. It will also tend to be inflationary by raising tuitions.
— Lawrence H. Summers (@LHSummers) August 22, 2022
Former Treasury Secretary Lawrence Summers also said forgiving student loan debt could increase tuition and inflation in a thread of posts on Twitter Sunday.
“Student loan debt relief is spending that raises demand and increases inflation,” Summers posted. “It consumes resources that could be better used helping those who did not, for whatever reason, have the chance to attend college. It will also tend to be inflationary by raising tuitions.”
The White House did not immediately respond to a request for comment by the Daily Caller News Foundation.
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The “everyone should be entitled to a college education” has been a decades long grifting scheme by Democrats and liberal colleges to enrich themselves and promote their Socialist ideology.
Colleges have continually lowered their standards (while continually increasing costs) to pump out ultra liberal college graduates with no marketable degrees in majors like “Gender Studies” or “Community Organizing”. The colleges don’t care because the government now owns the student loan business so the colleges always get paid and the government gets all the interest on the loans. The indoctrinated students are angry because they can’t get jobs (except at Starbucks) but will always vote Democratic because they are promised “loan forgiveness” and now Joe Brandon has passed another illegal “executive order” to make that happen. Of course, the government won’t really pay for any “loan forgiveness”; it’s just another 300 billion dollar money printing exercise (like the just passed 370 billion “Inflation Reduction Act”) that will dramatically increase inflation and taxes on the middle class. Moreover, it’s a moral and criminal affront to steal money from those who paid their loans or the majority of Americans who never went to college.
Meanwhile, the real high paying six figure jobs (Plumber, Welder, Electrician) face massive shortages across the country because all those kids were getting their useless degrees instead of preparing for “real life” work. The government needs to stop all financial support of universities and remove their tax exempt status (let them stand or fall on their own), and get out of the student loan business. Then the Department of Education needs to be dismantled. At this point they are just another bloated government waste of taxpayer dollars with thousands of employees and a 68 Billion dollar budget.