Jason Furman, who was in charge of President Barack Obama’s Council of Economic Advisors, has slammed the Biden administration’s “reckless” student loan forgiveness order.
Following Biden’s announcement that student loan debt up to $10,000 will be waived for anyone earning up to $125,000 and double that figure for those who received Pell Grants. Furman, a key member of the Obama administration, posted a massive thread criticizing the move.
“Pouring roughly half trillion dollars of gasoline on the inflationary fire that is already burning is reckless,” he wrote. “Doing it while going well beyond one campaign promise ($10K of student loan relief) and breaking another (all proposals paid for) is even worse.”
He added, “The White House fact sheet has sympathetic examples about a construction worker making $38K and a married nurse making $77,000 a year. But then why design a policy that would provide up to $40,000 to a married couple making $249,000? Why include law and business school students?”
The economist estimated that canceling around $20,000 in student loans per student would increase inflation by 0.2% to 0.3%.
Miguel Cardona, Biden’s Education Secretary, who is not an economist, rebutted Furman’s warnings.
Cardona also admitted that anyone who already paid the student loans would not be getting any benefits from the executive order. Effectively, anyone who showed an ounce of fiscal responsibility will have to foot the bill for other students' debts.