(CNSNews.com) - Education Secretary Miguel Cardona says the goal of the student loan forgiveness plan announced by President Joe Biden on Wednesday "is to make sure that Americans are not worse off than they were before the pandemic.
He said the "targeted" relief will help everyone, including those who have repaid their loans:
"To those who have paid for it, you know, we're targeting those who are struggling right now to help get them on their feet. And that helps everyone. Because when you have less people defaulting on loans, that helps everyone's economy," Cardona told ABC News.
Cardona noted that while the $20,000 in loan forgiveness for Pell Grant recipients ($10,000 loan forgiveness for others) "is getting a lot of attention," he said he's just as proud of the "income-driven repayment plan," which means "we are not going to ask folks to pay more than they can afford," he said.
"So we went from requiring folks for their undergrad degree to pay 10 percent of their income, their disposable income, down to 5 percent. That means half. Half of their payments are going to have to be made now.
“And lastly, we are going to continue to fight to double Pell (Grants). We know that Pell helps level the playing field, and it gives access to more people from lower income communities to have access to higher education.”
The host asked Cardona, "What's your message to those who didn’t attend college, because it was too expensive, or did manage to pay off their debt and not feel that they are, quote, footing the bill for others?
"Well, look, this is very consistent with what we did during the pandemic to other groups, right? Small business owners needed a little bit of support, and we provided that to keep them open, to keep them in business.
“And we’re investing in Americans right now. So to those who have paid for it, you know, we're targeting those who are struggling right now to help get them on their feet. And That helps everyone. Because when you have less people defaulting on loans, that helps everyone's economy."
Cardona rejected concerns that loan relief will make inflation worse:
"Look, number one, when someone is struggling, close to default, talking about helping them is going to give them a little bit more money in their pocketbooks to help with their regular cost of mortgage, or whatever payments they have. And ten, if you look at reports from Moody's and others, there is an offset here.
"Because those making over $125,000 are going to restart payment in January. Which means four billion dollars is going to be pumped into it. That is going to lower the inflation."
Cardona told CNN on Wednesday that "43 million people across the country are going to benefit from what was mentioned today. 40 percent of those people, 20 million people, are going to learn today that their total debt is canceled. You know, that's going to help them get back on their feet. So I'm proud of this.
He also said the people he's talking to are "thrilled."
"I talked to a teacher yesterday who said, this is going to help me. Now I can help my daughter go to college. I've gotten communication from folks all over the country saying we needed this, thank you.
“You know, and I think what the president was referring to earlier, it reminds me a lot of school re-openings. I had people telling me, don't open schools, it's unsafe. Other people saying if you don't open it, you're doing a disservice to students.
"We're delivering for the American people based on what we know to be true. We cannot have folks worse off now than they were before the pandemic because of the pandemic. And the president delivered today."