Some experts believe the Biden administration could announce a decision on whether to extend a more than two-year-long pause on federal student loan debt this week, ahead of the current Aug. 31 deadline. Many borrowers are hoping the Education Department will extend that break and announce up to $10,000 in loan forgiveness.
Currently, about 44 million borrowers owe a collective $1.7 trillion in federal student loan debt.
Yet, a new poll finds Americans worry that debt forgiveness could have unintended consequences.
Already battling higher prices, 59% of Americans are concerned that student loan forgiveness will make inflation worse, according to a new CNBC survey, conducted online by Momentive among a national sample of 5,142 adults from Aug. 4 to 15.
Still, the concern that canceling student debt would give borrowers more money to spend and therefore increase inflation may not hold true for many borrowers. Some say they would not change their spending habits if their college debt — or a portion of it — is canceled. Also, others haven’t made many changes during the payment pause.
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Malcolm Newman, who works at The Academy of Natural Sciences in Philadelphia, earned a bachelor’s degree in environmental science from Drexel University. Now 26, he said he’s been paying back private student loan debt during the moratorium on federal student loan repayment.
“I haven’t really altered my spending habits. You know when those payments kick back in, I’ll have a little bit less than what I’ve been used to,” he said. “But it’s nothing that’s going to, you know, put me under or get me evicted from my house.”
The CNBC survey found that 53% of adults polled say if forgiveness put extra money back in their monthly budget, they would pay off other loans, and 45% said they would save that money for retirement.
Source Article from https://www.cnbc.com/2022/08/22/americans-are-concerned-student-loan-forgiveness-will-worsen-inflation.html
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