Majority worried about student loan forgiveness impact on inflation: poll
Roughly 6 in 10 Americans — 59 percent — say they are worried that forgiving student loan debt could make inflation worse, according to a new CNBC poll.
The survey also found that 34 percent of respondents say only those in need should have debt forgiven, 32 percent say all of those with student loan debt should have it forgiven, and 30 percent say no debt should be forgiven.
The news comes a day after Education Secretary Miguel Cardona said an announcement from the Biden administration is coming soon regarding student loan debt, just ahead of an Aug. 31 expiration date for a temporary pause on loan payments.
It’s unclear if officials will announce another extension of the student loan freeze or reveal the administration’s intent to cancel some debt per borrower.
President Biden has faced calls to cancel up to $50,000 per borrower, although he has reportedly settled on a goal of forgiving $10,000 per borrower. Biden has previously said he would make a final decision by the end of August.
Just more than half of adults polled by CNBC — 53 percent — said any extra money from student loan forgiveness would go toward paying off other loans. Forty-five percent, meanwhile, said they would save the funds for retirement instead.
Any announcement of student loan forgiveness could come amid a period of economic uncertainty.
The inflation rate has reached a 40-year high and the economy shrank for two consecutive quarters, usually an indicator a country is in a recession.
Republicans have called canceling student debt “wildly inflationary” and have said it would benefit higher income Americans who don’t need the relief.
GOP lawmakers have even introduced bills intended to curb any plan that would forgive student loan debt, although legislation faces an uphill battle in the Democratic-controlled Congress.
Laura Beamer, a lead researcher for higher education finance at the Jain Family Institute, told The Hill this month that forgiving $10,000 in student debt would have a “minimal” impact on inflation.
Beamer also noted it would assist Americans with “higher debt to income ratios.”
“Those people are disproportionately hailing from disadvantaged groups and low socioeconomic status groups,” Beamer said.
More than 44 million Americans collectively owe $1.7 trillion in student loans.
The Biden administration has already canceled $32 billion through student loan relief for more than 1.6 million borrowers, mostly among students who were defrauded or misled by schools.
Around $10 billion of that was forgiven though the Public Service Loan Forgiveness program, which forgives debt for those who work in public service and other qualifying jobs after a certain amount of time.
The CNBC poll was conducted by Momentive among 5,142 adults from Aug. 4 to Aug. 15.