Democratic senator Elizabeth Warren on Wednesday made the assertion that the student-loan-cancellation program, which President Biden unilaterally declared earlier in the day, is “good for our economy.”
When asked during an appearance on CNN how student-loan bailouts would be fair to college graduates who already paid their debts, Warren insisted that the whole country would benefit.
“What the data show us is that, because of student loan debt, there are many people who don’t move out of their mama’s basement, who can’t save up money to buy a home, who don’t start small businesses, who don’t start a family. You relieve the debt burden some for those people, and we have more economic activity,” she said.
She seemed to suggest that student loan “forgiveness,” as progressives have misleadingly labeled it, helps to subsidize less productive members or more-affluent members of American society who can afford to major in expensive, uncompetitive disciplines, such as gender studies, who don’t typically land lucrative jobs. However, Warren failed to note that lower earners, such as blue-collar workers without a college degree, would likely be footing the bill via higher taxes.
“In other words, cancelling student-loan debt is good for the people whose debt is cancelled, but it is also good for our economy and the rest of America,” she said. Some economists have pointed out that simply making a large chunk of the nation’s outstanding student-loan debt supposedly “disappear” will likely exacerbate inflation, already at record levels and suffocating Americans’ finances.
“This has become part of our country now,” Warren said, referring to the so-called student-loan crisis. “People for whom their only sin was to want to try to get an education and not be in a family that couldn’t afford to write a check for it — as a nation, we can do better.”
In her comment, Warren was addressing the criticism of Senate Minority Leader Mitch McConnell, who on Wednesday called Biden’s unprecedented and likely unconstitutional action “a slap in the face to working Americans.”
“Democrats’ student-loan socialism is a slap in the face to working Americans who sacrificed to pay their debt or made different career choices to avoid debt. A wildly unfair redistribution of wealth toward higher-earning people,” McConnell said.
Biden’s order “cancels” $10,000 in federal student debt for individuals earning under $125,000 a year and households earning under $250,000 a year, as well as relieving $20,000 in debt for Pell grant recipients.