White House hits student-debt relief critic with PPP loan forgiveness past

By Steve Goldstein

The White House on Monday turned to a familiar tactic when defending criticism of its student-loan relief plan.

The White House's social media account tweeted Rep. Andrew Clyde's criticism of the latest move to provide student loan relief for 25 million people with the point that the Georgia Republican himself got $156,697 of debt extinguished from the Payment Protection Program.

It's not the first time the White House has gone down that route, having previously noted the PPP relief of other lawmakers including Rep. Matt Gaetz and Rep. Marjorie Taylor Greene, Republicans who criticized student-loan forgiveness.

PPP was a COVID-era program with the intent of loaning money to small businesses to keep employees from being laid off. One study, by authors including famed Massachusetts Institute of Technology economics professor David Autor, found it did preserve what it called 3 million "job years" of employment, at a cost of up to $257,000 per job. Most of the benefits went to business owners rather than workers, the study found.

PPP was designed so that the loans were easily forgiven. One examination from 2022 found $742 billion out of the $793 billion approved for 11.5 million loans was extinguished.

Biden's new program will rely on what's called the Higher Education Act to provide some loan relief to student borrowers. It's a combination of interest relief - $20,000 for borrowers whose balances have grown beyond what they originally borrowed - and full loan forgiveness for others.

The White House aims to start getting the relief to students by the fall, if it survives likely court challenges.

-Steve Goldstein

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04-09-24 0946ET

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