PHILADELPHIA (KYW Newsradio) — Roughly 43 million borrowers are now eligible to knock at least $10,000 off their student loans. For some, President Joe Biden’s recently announced college loan relief plan could also lower monthly payments.
However, economic experts like Villanova University’s Erasmus Kersting argue Biden’s plan doesn’t solve the bigger issues.
“The problem is that colleges cost too much, that students take out too much and too high loans, and they don’t generate the return, and so therefore, have problems paying it back,” he said.
In the short term, Kersting said Biden’s plan also doesn’t lessen inflation.
“If you give a large number of individuals a lot higher spending power, naturally they’re going to spend this money on something. And generally, the prices of those things will go up,” he explained.
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“For some households, this will be very good. But I think in the broad perspective, inflation already adds concerns, because of debt concerns, and because it doesn’t really fix the underlying problem,” he continued. “This is not an action that has broad support from economists.”
It’s still a positive move forward, though, as thousands of dollars will go back into the pockets of people bogged down with school debt.
Drexel University student Eduardo Rodrigues isn’t carrying student loans, but he knows people who are in favor of the relief.
“I know people that are very close to me that got the $10,000 off and really changed their whole plans for the year,” he said.
Others, however, say $10,000 barely scratches the surface due to high interest rates.
“For some people, it’s not going to solve anything,” said Drexel junior Theresa Kolter. “But for me, I think it’ll solve a little bit, but obviously not everything.”
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