April 7, 2022
1 min read

Biden’s breather for student loans fuels inflation concerns

Former US Treasury Secretary Lawrence Summers said on Twitter that the administration’s postponement “yet again” of student debt payments is “very hard to understand on policy terms”….reports Asian Lite News

US President Joe Biden’s newly announced plan to extend a pause on federal student loan repayments has drawn backlash from budget watchers and economists, who argue such untargeted move could add to inflation pressures.

“Extending the debt pause would be a massive handout to doctors and lawyers that would only feed more inflation and worsen the nation’s balance sheet,” said Maya MacGuineas, President of the Committee for a Responsible Federal Budget, a budget watch group.

In a statement on Tuesday, MacGuineas said the unemployment rate among college graduates with a bachelor’s degree is 2 per cent — which is in line with pre-pandemic levels and about as low as any time in the past two decades, Xinhua news agency reported.

“The debt pause disproportionately benefits high-income Americans with advanced degrees,” she said.

“Surely there are better-targeted ways to support college affordability.”


Former US Treasury Secretary Lawrence Summers said on Twitter that the administration’s postponement “yet again” of student debt payments is “very hard to understand on policy terms”.

“Wherever one stands on student debt relief this approach is regressive, uncertainty creating, untargeted and inappropriate at a time when the economy is overheated,” said Summers, who has been warning about the danger of rising inflation as early as February last year.

In a statement, Biden, however, said “millions of student loan borrowers would face significant economic hardship” if loan payments were to resume on schedule in May, and “delinquencies and defaults could threaten Americans’ financial stability”.

Loan payments were first put on hold in March 2020 under former President Donald Trump and have since been extended five times. Biden announced on Wednesday that his administration would extend a pause on federal student loan repayments through August 31, 2022.

Six-in-10 likely voters supported extending the pause on student loan payments, according to a poll released in February.

ALSO READ: Truss says working with G7 on new Russia sanctions

Previous Story

Russia accuses US of increasing military biological capability

Next Story

US Fed lays out plan to shrink balance sheet

Latest from USA

Trump names 23 countries as drug transits

Trump escalates America’s global war on drugs, naming 23 countries – including Pakistan, China and India –  in a narcotics watchlist. US President Donald Trump has sharpened his administration’s focus on the

India and US launch new space era

Washington event marks deeper cooperation on Moon, Mars and beyond as astronauts and officials hail partnership…reports Asian Lite News India and the United States have marked the start of what both sides

India, US to intensify talks on trade pact

India and US step up efforts to settle differences and push for early trade agreement despite tariff tensions…reports Asian Lite News India and the United States have signalled a renewed push towards

Fed Cuts Rates After Trump Clash

The Fed indicated that two more cuts could be on the way this year….reports Asian Lite News After a clash with US President Donald Trump, the Federal Reserve slashed interest rates by

Trump Labels Antifa a Terror Group

Trump did not elaborate on what parameters his administration would use to make the characterisation and what actions he would take to target a left-leaning movement. US President Donald Trump on Thursday
Go toTop

Don't Miss

Sisi, Blinken Discuss Gaza Crisis

Blinken commended Egypt’s role in promoting peace and expressed Washington’s

Indian-origin investor loses $2 million in FTX crash

The US House Financial Services Committee is probing the controversial