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In late August, President Joe Biden announced his intention to cancel student loans of up to $10,000. The president’s intention is to make this official through executive action and, according to a small businessman and bitcoin enthusiast, it could have an unexpected effect on the popular cryptocurrency.
According to an estimate made by the White House, 21% of the cancellations would directly affect people under the age of 25, while 44% will go to people between the ages of 26 and 39.
For Robert Hall, this is interesting considering that, according to a study by STILT, 94 % of all cryptocurrency buyers are Generation Z and millennials. In addition, other research from Finder found that, in the U.S., 61 % of crypto buyers are between the ages of 18 and 34.
“The average student loan debt for millennials was $43,210. The demographic aligns perfectly, so if this debt relief plan goes into effect, there is a potential for the $10,000 that would have been sent to the federal government to pay back student loans that could be conceivably spent to buy Bitcoin,” Hall opined in an interview with Bitcoin Magazine.
“The system is collapsing in real-time, and the people that understand Bitcoin should reap the benefits from early adoption,” he added.
The cost of Biden’s student debt cancellation
According to a nonpartisan analysis by the Wharton School (University of Pennsylvania), Biden’s initiative would cost $298 billion in 2022 and a total of $329 billion by 2031 if renewed every year.
Their analysis also focused on the effects of the potential measure on education itself. In this area, they found that “if student loan debt forgiveness is ongoing, students might eventually reorganize their financing toward additional borrowing. Moreover, more students might choose to attend qualifying education providers, including students who might otherwise have a harder time with repayment.”
“The inclusion of these two effects could, to some extent, make the program a bit more progressive while increasing budgetary costs. A third effect could also emerge: some of the benefit from debt forgiveness might be captured by colleges themselves in the form of higher prices (both tuition and net). We will continue to examine these issues as specific legislation proceeds,” they concluded.
Joaquín Núñez es hincha de Racing Club de Avellaneda y licenciado en comunicación periodística por la Universidad Católica Argentina. Se especializa en el escenario internacional y en la política norteamericana // Joaquín Núñez is a fan of Avellaneda's Racing Club and has a degree in journalistic communication from the Universidad Católica Argentina. He specializes in the international scene and American politics.