President Joe Biden’s student loan forgiveness announcement was a welcome one for the millions of Americans who struggle with student debt. However, two Northeastern economists question whether it was the right move for the economy.
The Biden administration announced on Wednesday that it would forgive $10,000—$20,000 for Pell Grant recipients—in student debt for borrowers who took out loans before June 30, 2022, and make less than $125,000. He also extended the freeze on payments to the end of the year, and offered to cap payments to 5% of a borrower’s income. Some borrowers will get relief automatically, but most will need to apply; applications will be open by the end of the year.