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Economics

Biden’s Student-Loan Relief Adds New Wrinkle to Inflation Debate

  • Payments to restart next year while tens of millions get aid
  • Bloomberg Economics sees 0.1-0.2 ppt inflation boost in 2023
Bloomberg business news
Biden Unveils Sweeping Student Debt Relief Program
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President Joe Biden’s plan to forgive a portion of student loans held by tens of millions of people will ripple through the economy as personal spending and savings shift, but no factor will be more closely watched than inflation.

In announcing the plan Wednesday, the White House flagged that the move would have competing impacts. On the one hand, it would reduce overall household debt and potentially provide more spending power. On the other, it offers a timeline to restart payments that have been suspended for more than two years.