President Biden unveiled a student loan relief program that will affect 45 million borrowers, according to the White House. They said an undergraduate student with loans typically has nearly $25,000 in debt.
The application for the program is expected to open in early October.
“The people who are going to have a little more money in their pockets, that's certainly positive," said Dr. Peter Rupert, a local economist and professor at UC Santa Barbara.
The Department of Education will provide up to $20,000 in debt cancellation to Pell Grant recipients, and up to $10,000 for non-Pell Grant recipients for loans held by the Department of Education.
Borrowers are eligible if they make under $125,000 as an individual or married couples who make less than $250,000 together.
A CNBC poll, conducted by Momentive, found that 59% of Americans they polled believe it will make inflation worse.
“Many people who are against it have been claiming it's going to be very inflationary, but as I said, I don't think that the scale of the program is really going to lead to anything inflationary," said Dr. Rupert.
The Department of Education estimates that almost 90% of recipients will be those making less than $75,000 a year.