Amid economic woes, NBC News reports most student loan handout recipients spending money on ‘travel’, ‘dining out’
NBC News Now reported that nearly three quarters of people receiving Biden’s student loan handouts are planning on using their extra cash on "travel" and "dining out."
In the midst of some of the highest inflation in 40 years and other economic strife, NBC News Now reported that nearly three quarters of people receiving President Biden’s student loan handouts are planning on using their extra cash on "travel" and "dining out."
The network briefly paused their 2022 midterm coverage for a quick report on student’s using their freed up loan money on more frivolous things than saving or "worrying about the future," and cited one expert who claimed that might be a good strategy to avoid burnout or "frustration."
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NBC News Now hosts discuss how student loan handout recipients plan on spending their money. (Screenshot/NBC News Now)
Biden’s student loan handout, which is set to forgive $10,000 of student loan debt for every borrower earning less than $250,000, has proven to be a contentious issue for many Americans.
Critics claim that handout, which costs over $400 billion in tax dollars according to the Congressional Budget Office, is unfair to those who have already paid off their student loans without receiving a handout, as well as being an extra burden on the average U.S. taxpayer.
Despite these arguments against the proposal, as well as a tough economic environment, NBC News Now’s report indicated that recipients are not necessarily looking to be frugal with their handout.
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WASHINGTON, DC - JULY 27: Student loan debt holders take part in a demonstration outside of the white house staff entrance to demand that President Biden cancel student loan debt in August on July 27, 2022 at the Executive Offices in Washington, DC. (Photo by Jemal Countess/Getty Images for We, The 45 Million) (Jemal Countess/Getty Images for We, The 45 Million)
During the network’s "CNBC Money Minute," the show’s co-host Morgan Radford stated that "recipients of Biden’s student debt forgiveness plan could see their monthly payments drop up to $300 a month in the coming weeks, but get this, 73% say they actually plan to spend that extra cash on travel and dining out."
Fellow co-host Vicky Nguyen introduced CNBC "Tech Check" anchor Deirdre Bosa to report the story. Nguyen asked, "So Deirdre, why are people more inclined to spend money they’re saving on non-essentials instead of paying off their bills? I think we may know the answer."
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Bosa responded, saying, "It could be easy as well for some people to enjoy traveling and eating out rather than worrying about the future." Bosa cited a financial coach who told CNBC.com that "you should not use the loan forgiveness only for long term goals," because "your short term self may get frustrated and give up on planning ahead altogether."
Bosa added, "So instead, they say, ‘Make sure your regular bills are paid, check in on your goals and try to achieve a balance that also lets you invest in your future self."
President Biden announced that he was forgiving up to $20,000 in student loan debt, carrying an estimated price tag of $300 billion. (Bonnie Cash/UPI/Bloomberg via Getty Images)