Economic experts weigh in on the effects of Biden’s student loan relief plan

Many critics of the plan have come forward in recent days

Questions keep piling up two days after President Biden announced his student loan relief plan.

ROANOKE, Va. – Questions keep piling up two days after President Biden announced his student loan relief plan.

But Roanoke College economic professor Michael Enz said that it’s still too early to pinpoint the exact effects.

“When people ask these questions, they really want a number to put with it and a lot of that depends on first and foremost who takes advantage of this program,” Enz said.

As the questions roll in, so do the critics.

“Some people benefit from programs, some people don’t,” Enz said. “Any time there’s a program that excludes at least some people that isn’t universally accessible to everyone, you get into the idea of fairness. I’ve seen the idea of fairness a lot more with this issue than with others, so that confuses me a little bit.”

Some critics include those who have already paid off their loans and will not receive any sort of credit, but Enz said that’s not the point of the relief program.

“If you’ve already paid your loans, then it’s no longer an issue,” he said. “We’re targeting particular people who are suffering from current conditions.”

Virginia Tech Economics Professor Nicolaus Tideman has similar thoughts.

“You can’t change the rules without creating comments of unfairness,” Tideman said. “But we want to change the rules from time to time because we think we can do things better.”

Another point of contention comes from who really pays for this relief.

“We can make up this money in the future by either raising taxes or issuing greater debt,” Enz said.

Changing the rules of student loans means changing things like inflation as well, but not as much as you may think.

“Drivers of inflation that took us over 90% are much much stronger than what we’re seeing with this particular executive order,” Enz said.

Neither Enz nor Tideman think that this plan is an end all be all.

“I’ve heard the comment, and I would endorse it, that this is a Band-Aid when we need a permanent fix,” Tideman said.

“Do I think it’s unfair? Am I looking at it from my own standpoint and saying that it’s fair? No, and I’m not displeased in that case,” Enz said. “Am I looking at it as good economic policy? No. I think we could be doing other things. And those to ideas can be consistent with one another.”

There is no clear-cut answer when it comes to a permanent solution, but Tideman said that it starts at the decision to go to college.

“I think the way to do that is to ask people who are somewhat dubious to go to community college rather than a four-year college because the cost is so much lower,” Tideman said.

About the Author:

Abbie Coleman officially joined the WSLS 10 News team in January 2023.