Student debt relief package may even lead to deflation – U.S. official

Students react as U.S. President Joe Biden takes the stage during the commencement ceremony at the University of Delaware in Newark, Delaware, U.S., May 28, 2022. REUTERS/Elizabeth Frantz/File Photo

WASHINGTON – A plan unveiled by the Biden administration to forgive $10,000 in federal student debt and defer payments through year end could have a neutral impact on consumer prices or even be deflationary, a senior administration official said on Wednesday.

(The reverse of inflation, deflation enables one to buy consumer goods in the near future at the same amount of money one currently holds.-Ed)

Speaking on a call previewing President Joe Biden’s remarks about the program, officials also said the program could benefit 43 million student loan borrowers.