A majority of Americans oppose President Biden’s student loan forgiveness plan once they’re keyed in to some of its details, according to a new poll.
SO WHAT
The substance of Biden’s policy doesn’t match his messaging.
WHAT HAPPENED
64% of respondents to the Cato Institute survey released last week said they supported the government canceling up to $10,000 in student debt for individuals who make less than $150,000, but that figure collapsed in the face of trade-offs.
Under the Biden administration’s plan, which the president announced last month and will cost an estimated $1 trillion, individual borrowers earning less than $125,000 ($250,000 for married couples or heads of households) per year are eligible for up to $10,000 in debt relief.
- The number of respondents to the Cato poll who said they supported canceling student debt fell to 36%, if doing so raises their taxes, and 32% back the measure if it primarily benefits higher-income people.
- Just 25% said they support student loan cancelation, if it raises college tuition and fees.
- And only 29% backed the relief, if it meant more employers would demand college degrees as a condition of employment.
BIG PICTURE
The hypotheticals posed in the Cato poll are likely real world outcomes of student loan forgiveness, according to a number of expert analyses.
- The latest Penn Wharton Budget Model estimated that more than 62% of the debt forgiveness will go to households making upwards of $50,795 per year, and more than a quarter will go to households making more than $82,400.
- The cost of the loan forgiveness package will fall on American taxpayers through a combination of more borrowing, spending cuts, lost revenues, and higher taxes.
- Lawrence Summers, a former Treasury Secretary for President Obama and a leading Democratic economist, warned that student loan forgiveness would “contribute to inflation macro economically by offering unreasonably generous student loan relief or micro economically by encouraging college tuition increases.”