Joe Biden keeps his promise to ease the student loan crisis, and up to 43 million Americans will have their government-guaranteed student loans forgiven.
President of the United States Joe Biden deliver on his election promise to save the student loan crisis.
According to Biden’s plan, the majority of state-subsidized student loans will be forgiven for $10,000. Indigent students who studied on a scholarship can be forgiven up to $20,000.
The president talked about the forgiveness of student loans on his twitter account.
According to the administration, up to 43 million student debtors can enjoy the forgiveness.
As early as March 2020, Biden promised to support student loan forgiveness of at least $10,000 for those with government-guaranteed student loans.
Due to the corona pandemic, Biden’s election promise had not been fulfilled. A large number of Americans have been allowed to take a break from paying their student loans until March 2020.
The benefit is ending at the end of August, but the government is expected to extend the payment break until the end of the year. The break has been extended financial magazine according to Forbes (you will switch to another service) already five times as well Donald Trump’s that during Joe Biden’s presidency.
The debt can even be over $200,000
US Department of Education according to statistics (you switch to another service) about 75 percent of student loan borrowers had less than $40,000 in outstanding loans in 2021, and about 47 percent still have more than $20,000 in loans. At the moment, the dollar and the euro are roughly equal.
Even six-figure sums are not uncommon. According to statistics, about one million people have more than $200,000 in unpaid student loans.
The loan issue divides the parties
So the relief does not apply to everyone.
Representatives of the Democratic Party had made it clear that clearing $10,000 per borrower is not enough.
Majority Leader of the United States Senate, a Democrat Chuck Schumer spoke with President Biden about student loans last Tuesday, according to Reuters. Schumer’s message has remained the same for a long time: canceling as many student loans as possible would be both morally and financially the right solution.
Schumer has already tried to talk Biden into increasing the $10,000 amount to $50,000. Biden has already publicly refused this in the spring.
Republicans in opposition have a different view on student loan forgiveness. Several Republican politicians have said that the solution would accelerate inflation. Now the administration assures that the pardon would not have an effect of accelerating inflation.
It’s also about equality
Student loans especially apply to young people. In the United States, the vast majority of student loan debtors are between 25 and 34 years old. 67 percent of student debtors are under 40 years old.
Democrat pollster Celinda Lake told the news agency AP (you will switch to another service), that student loans are a threshold issue for young voters that affects their career choices and other big decisions. If young voters are to be mobilized for the by-elections, a solution that pleases the party’s potential voters must be found.
Racial issues have also come up in the student loan debate. Director of the NAACP, an organization promoting African American civil rights Derrick Johnson commented to the news agency AP about Biden’s anticipated decisions as problematic.
Johnson reminded that in the United States, black students are likely to get into debt worse than white students. According to her, the $10,000 decision is yet another example of how black women in particular are being ignored in decision-making.
Now the forgiveness plan includes an increase for the needy.
Low-income families are left behind in the United States without help in education because the studies cost so much. Varattoma has the options of skipping studies altogether or taking out a ridiculous student loan that has to be paid for decades.
There are many variables behind the crisis
At the same time, the loan program established by the government lost its private lenders, who feared the effects of the recession on loans. Since the summer of 2010, the United States has guaranteed loans directly from the state treasury, which has made it easier to get loans.
Tuition fees for both private and public schools have increased drastically. Tuition at private for-profit schools has even tripled in the past 30 years, and public schools have doubled. The background is, among other things, the effects of the recession and the cutting of government subsidies.
In addition, for example, private schools are free to charge unnecessarily large sums for their tuition because loans are easily available.