The write-off of at least $10,000 per loan only applies to those whose income does not exceed $125,000 annually.
US President Joe Biden has decided to partially write off student loans.
“Keeping my campaign promise, my administration is announcing a plan aimed at providing relief to working and middle-class families as they prepare to resume repaying federal student loans in January 2023“, the American president wrote on Twitter.
The write-off of at least $10,000 per loan 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 issue is at the center of a heated public debate in the country, as a year of college can cost many tens of thousands of dollars. American consumers are saddled with $1.75 trillion in student loan debt as a result of high tuition fees that are much higher than those of most rich countries.
In keeping with my campaign promise, my Administration is announcing a plan to give working and middle class families breathing room as they prepare to resume federal student loan payments in January 2023.
I’ll have more details this afternoon. pic.twitter.com/kuZNqoMe4I
— President Biden (@POTUS) August 24, 2022
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.
In any case, as a counter-argument to the aforementioned government decision, the fear is expressed that this will increase the inflationary pressure as hundreds of billions of dollars will be released for consumption.
It is recalled that due to the pandemic, the government had decided to stop interest and principal repayments for most federal student loans starting in March 2020. This “pause of payments” will end at the end of August.
Democrats have been pushing Biden to write off the $50,000 limit per lender, arguing that their debt makes it impossible for young Americans to save money for a home or other big purchases. Republicans, for their part, argue that the “gift” of loans will disproportionately help high earners.
Reuters
Read the News today and get the latest news. Follow us on Google News and be the first to learn all the news from Skai.gr.
