Larry Summers: Student debt forgiveness will make inflation worseBy Thomas Barrabi
August 22, 2022
Famed economist Larry Summers warned Monday that the Biden administration could make the current inflation crisis worse if it goes too far with student debt forgiveness initiatives.
Summers, a former top economic official in the Clinton and Obama administrations, called for caution as reports swirl that President Biden is close to making a decision on whether to extend the ongoing payment moratorium for student loans – and potentially wipe some debt clean.
“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 said in a series of tweets on Monday.
“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,” Summers added.
The pause on student loan payments, first imposed in the early days of the COVID-19 pandemic, is currently slated to end on Aug. 31. On Sunday, US Education Secretary Miguel Cardona told NBC that Biden will decide how to proceed within the “next week or so.”
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Source:
https://nypost.com/2022/08/22/larry-summers-student-debt-forgiveness-will-make-inflation-worse/
