Top Democrat Economist Warns Biden Will Make Inflation Worse If Student Loans Forgiven

On Monday, top Democrat economist Larry Summers, who served in the Clinton and Obama administrations, warned that Democrat President Joe Biden could make inflation worse if his administration forgives student loan debt.

“I hope the Administration does not contribute to inflation macro economically by offering unreasonably generous student loan relief or micro economically by encouraging college tuition increases,” Summers wrote on Twitter. “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.”

“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,” he continued. “The worst idea would be a continuation of the current moratorium that benefits among others highly paid surgeons, lawyers and investment bankers.”

“If relief is to be given it should not set any precedent, it should only be given for the first few thousand dollars of debt, and for those with genuinely middle class incomes,” Summers added.

Summers’ comments come as the Biden administration is expected to announce a decision on student loans before the pause on federal student loan payments is set to expire on August 31.

Over the weekend, Education Secretary Miguel Cardona said that Americans could expect that announcement in the “next week or so.”

“With some 10 days to go, Americans have been left guessing whether President Joe Biden will extend the current moratorium or, perhaps, forgive some of their debt,” CNN explained.

“We’ve been talking daily about this, and I can tell you the American people will hear within the next week or so from the President and the Department of Education on what we’re going to be doing around that,” Cardona told NBC’s Chuck Todd on “Meet the Press.”