The president of the USA Joe Biden announced today the partial write-off of student loans, an issue at the center of a heated public debate in the country, as a year at university can to cost many tens of thousands of dollars.
“Keeping my campaign promise, my government is announcing a plan aimed at providing relief to working and middle-class families as they prepare to restart their mortgage repayments of federal student loans in January 2023”the American president wrote on Twitter.
This height deletion at least $10,000 per loan, it only applies to those whose income does not exceed $125,000 annually.
This decision by Biden is expected to strengthen the Democrats ahead of the November midterm elections, as it will win the votes of young students. The government is dismissing fears that the decision will also intensify inflationary pressures, arguing that hundreds of billions of dollars will be freed up for consumption.
More announcements are expected
American consumers are saddled with a whopping $1.75 trillion in student loan debt as a result of high tuition fees that are far higher than those in most wealthy countries.
Biden is expected to make an announcement on the matter later today.
According to a study by the Federal Reserve Bank of New York, if all student loans were cut by $10,000, the total amount would rise to $321 billion while eliminating debt for 11.8 million borrowers, or 31% of college students.
Due to the pandemic, the government had decided to stop interest and principal repayments on most federal student loans starting in March 2020. This “cessation of payments» will expire at the end of August.
Democrats, according to the Athens News Agency, were pressuring Biden to delete amount of $50,000 per lender, arguing that their debt makes it impossible for young Americans to save money for a home or other large purchases. Republicans, for their part, argue that the “gift” of loans will disproportionately help high earners.
Source: News Beast