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Rabat – US President Joe Biden announced on Wednesday evening the forgiving of student debt for millions of students, a minor move to address one of America’s biggest concerns.
The debt forgiveness will cancel $10,000 for every American with student debt. Biden also pledged that no high-income households would benefit from his plan.
Most federal student loans have required no payments since March 2020, due to the COVID-19 pandemic.
But while democrats had been pushing Biden to forgive at least $50,000 of debt, economists worry that debt forgiveness could add to the country’s inflation problem, freeing up billions for big-ticket consumer spending.
Republicans similarly have criticized the plan, citing concerns that it will mostly benefit high-income households. Some critics have also called it “unfair” to people who have already paid off their debt or avoided taking out loans.
Student debt has been one of the most pressing issues for Americans, and many beneficiaries of Biden’s program have said they don’t believe forgiving $10,000 of the debt is enough for them to achieve financial security. Americans on average have roughly $28,400 in student debt, according to data from LendingTree.
According to the Federal Reserve, America’s central bank, the total amount of student debt held by borrowers in the second quarter of 2022 was more than $1.5 trillion.
