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Canceling at Least $10,000 of Student Loan Debt Will Help Lower the Cost of Living
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Canceling at Least $10,000 of Student Loan Debt Will Help Lower the Cost of Living

Canceling student loans offers targeted relief crucial to helping households improve their financial security—it is not a decisive factor in battling inflation.

Commentary has been increasingly focused on whether student debt cancellation will exacerbate inflation. However, inflation is not the lens one should use to analyze the student debt crisis. The student debt crisis predates current inflationary pressures and is part of a decades-long affordability struggle challenging the 43 million Americans who are student loan borrowers as well as their households. The costs of student loan debt have been increasing faster than income for years as the volume of student loan debt has grown from around $750 billion to $1.6 trillion since 2010. Targeted student debt cancellation of at least $10,000 will help millions of Americans better manage their budgets, build wealth, and reduce the racial wealth gap, immediately improving financial security and laying the foundation for faster upward economic mobility.

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Authors

Rose Khattar

Associate Director, Economic Analysis

Zahir Rasheed

Research and Press Assistant

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