The president of the National Association for the Advancement of Colored People (NAACP) attacked the Biden administration’s proposed plan to relieve student loan borrowers, saying it does not do enough to address the outstanding $1.75 trillion in student loan debt nationwide.
President Joe Biden is poised to forgive $10,000 in student loan debt for 40 million student loan borrowers with yearly incomes of less than $125,000. The potential wide-scale student loan cancellation, which Biden promised during his presidential campaign, has put his administration under pressure with calls to wipe out more.
“If the rumors are true, we’ve got a problem. And tragically, we’ve experienced this so many times before,” NAACP President and CEO Derrick Johnson wrote in a Tuesday statement, accusing that the student debt could “left Black people, especially Black women, behind.”
Sweeping student loan forgiveness, meanwhile, will likely anger those who saved for higher education or have already paid for much of their debt.
InflationAlthough some see a permanent cancelation of student loans as a way to improve everyday lives, former White House economic adviser Stephen Moore warned it would make the record-high inflation even worse.
“And by the way, if they were to do this plan, would anybody ever in the rest of history pay their student loans when the government’s just going to forgive you for them? So we’re going to have problems in the short term and long term if we do this,” said Moore.
Prior to the initial outbreak of the COVID-19 pandemic, direct loan borrowers were roughly split in half between those making progress on their loans and those with increasing balances. Nearly all borrowers stopped making payments when the pause on repayments began in 2020, according to the Fed.