Former Treasury Secretary and National Economic Council director Lawrence Summers warned on Monday that a plan from President Joe Biden to cancel thousands of dollars in student loans per borrower could worsen runaway college tuition costs.
White House officials are leaning toward a student debt cancellation of $10,000 for each borrower earning under $125,000, according to a report from CNN. The decision looms as the White House also deliberates whether to extend the present moratorium on federal student loan payments, which is currently slated to expire on August 31.
“The fear of the Lord is the beginning of knowledge; fools despise wisdom and instruction.” Proverbs 1:10 ESV
Summers, a frequent skeptic of the Biden economic agenda despite his own left-wing leanings, commented on social media that the potential loan cancellation, if “unreasonably generous,” could contribute to higher levels of inflation and more colleges hiking their prices.
“Every dollar spent on student loan relief is a dollar that could have gone to support those who don’t get the opportunity to go to college,” Summers explained. “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.”