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Biden forgives student loans for millions of Americans

Amelia Young by Amelia Young
August 24, 2022
in US Stocks
0

Home » Biden forgives student loans for millions of Americans

WASHINGTON, Aug 24 (Reuters) – President Joe Biden said on Wednesday that the U.S. government will forgive $10,000 in student loans for many debt-saddled college-goers, a move that could boost support for his fellow Democrats in the November congressional elections but also may fuel inflation.

Canceling the debt will free up hundreds of billions of dollars for new consumer spending that could be aimed at homebuying, adding a new wrinkle to the country’s inflation fight, according to economists.

“Earning a college degree or certificate should give every person in America a leg up in securing a bright future. But for too many people, student loan debt has hindered their ability to achieve their dreams – including buying a home, starting a business or providing for their family,” Education Secretary Miguel Cardona said in a statement.

The White House said the country’s “skyrocketing cumulative federal student loan debt – $1.6 trillion and rising for more than 45 million borrowers – is a significant burden on America’s middle class.”

Biden is expected to speak on the matter later on Wednesday at the White House.

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Many Democrats had pushed for Biden to forgive as much as $50,000 per borrower, but cheered his action. Republicans argue the move will disproportionately help people earning higher incomes. Republicans are seeking to regain control of Congress in the November elections.

U.S. consumers carry a massive $1.75 trillion in student loan debt, most of it held by the federal government, the result of university tuition fees substantially higher than in most other rich countries.

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Amelia Young

Amelia Young

She established her career with The New York Times and shifted to The Wall Street Journal in 2017.

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