Elizabeth Warren Explains How Student Loan Forgiveness Will Fight Inflation as Americans Escape 'Debt Hell'

Mar. 15, 2025

Sen. Elizabeth Warren.Photo: Tom Williams/CQ-Roll Call, Inc via Getty

When Sen.Elizabeth Warrentakes up a cause, she gives it everything she’s got — and though it would be misleading to call her the mastermind behind PresidentJoe Biden’s targetedstudent loan forgiveness plan, there’s no question that her years of pushing to alleviate student debt created an environment in which Biden could get on board.

“Tens of millions of people across this country have tried to get an education and have ended up with debts that keep them from moving out of their mom’s basement, keep them from saving up to buy a home, keep them from starting a small business, and even keep them from starting a family,” she says.

To critics, student loan forgiveness isdescribed as an unfair use of taxpayer dollarsthat “punishes” those who already paid off debt, or didn’t take out loans at all. But proponents of canceling debt never aimed for equality — the goal has always been equity.

“Higher ed is becoming a way to further divide people economically instead of bring them together. If somebody can afford to write a check to go to college, if they come from a family that can pay for it, they’ve got a pretty smooth sailing path ahead for their place in America’s middle class,” Warren says. “For anyone whose family can’t afford to write a check to send them to college, the path forward is through debt hell.”

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An equitable society isn’t about being “fair,” if the definition of fairness is giving wealthier Americans the same amount of financial support as those in need.

“This is very much about helping America’s working class and middle class,” Warren explains. “When the cancellation is finished, half of all Latino borrowers will be completely debt free, and 45% of all African American borrowers won’t owe another penny. This is an important step in helping close the racial wealth gap in America.”

What about inflation?

Before the Biden administration formally revealed its loan forgiveness plan this week, CNBC released survey results showing that59% of Americans feared student debt cancellation would worsen inflation, which is finally appearing to ease after months of strapping Americans thin.

“The reason for that,” Warren explains, “is that the president has coupled cancellation with restarting payments. So 20 million Americans will owe no more debt, but the 23 million Americans who do owe debt will start paying an average of about $400 a month. That will fight inflation, not add to it.”

Warren, along with Senate Majority Leader Chuck Schumer, famously fought to get $50,000 in debt canceled for borrowers in need, a number well above what Biden was willing to commit to. But rather than focus on the deficits, Warren prefers to focus on the positives.

“There’s more good that we can do, but now is a moment to celebrate the 20 million Americans who for the first time in their adult lives will not owe any student loan debt,” she says. “This is the beginning.

source: people.com