\n\n“even though student debt relief might not look like spending the way we traditionally think of it\u2014the government isn’t cutting checks or awarding grants here, the way it did in the American Rescue Plan, for instance\u2014economically, it will function the same way.<\/p>\n\n\n\n
Because money is fungible, student loan borrowers will effectively now have extra discretionary income equal to whatever they would have had to pay towards that $10,000 in loans. That might sound great, but remember that the standard definition for inflation is what happens when a larger supply of money is chasing the same amount of goods and services. Money that would have been spent paying back loans will, upon the conclusion of the repayment moratorium, remain circulating in the regular economy. Ending the repayment moratorium without passing forgiveness would’ve been deflationary by returning U.S. dollars to Treasury.”<\/p>\n\n\n\n