Elizabeth Warren insists Biden’s student loan handout is 'good for our economy'

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Elizabeth Warren: Student debt handout 'good' for economy

Sen. Elizabeth Warren, D-Mass., told "CNN Newsroom" on Wednesday that President Biden's student loan handout would be good for the economy despite inflation concerns.

Sen. Elizabeth Warren, D-Mass., defended President Biden’s student loan announcement on "CNN Newsroom" Wednesday, claiming the $300 billion handout will be "good for our economy."

President Biden officially announced that morning that he will cancel $10,000 of federal student loan debt for certain borrowers making less than $125,000 per year, and up to $20,000 for Pell Grant recipients. The plan is expected to cost approximately $300 billion, with the nation's federal student debt now topping $1.6 trillion. The national debt, according to the Treasury Department, currently sits at $30.7 trillion.

Although Republicans have attacked this move by the White House, Warren insisted that the plan is "very popular." 

"Look, I’m not at all surprised that Mitch McConnell is attacking this. The reason he’s attacking it is because it is very, very popular. Popular among Democrats, independents, Republicans - popular," she said. 

Sen. Elizabeth Warren, D-Mass., speaks during a protest outside of the U.S. Supreme Court Tuesday, May 3, 2022 in Washington.  (AP Photo/Alex Brandon)

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"You know why?" Warren continued. "Because I don’t think there’s anybody left in America who doesn’t know somebody who is not struggling with student loan debt. This has become a part of our country now. People for whom their only sin was to want to try to get an education and not be in a family that could afford to write a check for it." 

Warren has repeatedly argued for student loan "forgiveness" in the past, even criticizing Biden for refusing to issue an executive order on this debt. This came despite economists warning that canceling even $10,000 worth of debt could add at least .3% to inflation rates. Warren previously denied evidence that inflation could increase.

In the face of still-high levels of inflation, she also argued on CNN that the student loan handouts would actually be good for the economy.

President Joe Biden announces student loan relief with Education Secretary Miguel Cardona (R) on August 24, 2022 in the Roosevelt Room of the White House in Washington, DC. (OLIVIER DOULIERY/AFP via Getty Images)

"What we’re saying is as a nation we can do better than that. We can invest in our people. We can help our people. And ultimately what the data shows us is that because of student loan debt, there are many people who don’t move out of their mama’s basement, who can’t save up money to buy a home, who don’t start small businesses, who don’t start a family. You relieve the debt burden some for those people. And we have more economic activity," she claimed.

"In other words, canceling student loan debt is good for people whose debt is canceled. It is also good for our economy and the rest of America," Warren added.

Critics say Biden's student loan handout pours "gasoline on the inflationary fire."

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A sign asking President Biden to Cancel Student Debt is seen posted on Pennsylvania Ave near the White House staff entrance during a demonstration demanding that President Biden cancel student loan debt in August on July 27, 2022 at the Executive Offices in Washington, DC. (Jemal Countess/Getty Images for We, The 45 Million)

Warren faced backlash during her 2020 presidential campaign after being confronted by an Iowa father questioning what she plans to do about people who successfully paid off their student loans or graduated without debt.

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"I just wanted to ask one question. My daughter is getting out of school. I've saved all my money. She doesn't have any student loans. Am I going to get my money back?" the father asked.

"Of course not," Warren answered.

Fox News’ Morgan Phillips contributed to this report.