The pause on student loan repayments that has lasted for more than two years is supposed to end at the end of the month if the Biden administration does not extend it. Borrowers are hoping for the pause to continue and perhaps announce $10,000 in loan forgiveness.
However, most Americans aren’t so sure this is the best thing for the country. The borrowers represent more than 10% of the entire US population, effectively giving a high percentage of the country tax relief for at least a portion of over $1.5 trillion in federal student loans.
The number one issue Americans have focused on heading to the polls this fall is inflation concerns, and that plays into skepticism over more government subsidies that have reached high levels during the pandemic. Additionally, older Americans have expressed frustration at having to repay their student loans as well, yet they don’t receive the same benefit for loans that have already been repaid.
A CNBC poll said 59% of Americans are skeptical of the program and 30% of all adults say there should be no student loan forgiveness for anyone, with women much more supportive of it. loan forgiveness than men.
In general, polls have shown Democrats far more supportive of loan forgiveness than Republicans, with conservatives pointing out that the borrower agreed to the terms of the loan to begin with. However, analysts have also pointed out that it can be considered a tax credit for educated people, while leaving those without a college degree even further behind.
Small business loans are often given to Americans with a high school diploma and no more, and no one asks for loan forgiveness for these people. Democrats thought they had a winning stake, but that doesn’t seem quite as clear given current economic trends. The decision will affect lending trends for the rest of the year and into 2023.