The US government wants to partially waive the repayment of student loans. President Biden is rolling out debt relief for former students. Millions of university graduates could benefit from it.
He had promised during the election campaign: US President Joe Biden presented his plan for debt relief for people with a university education. Anyone who studies in the USA usually starts their professional life with a mountain of debt because of the tuition fees and other costs. Now many former students are to be financially relieved.
$10,000 tuition waiver
Those earning less than $125,000 a year will be able to waive $10,000 in student finance debt. Students from low-income families who have received a special state loan from the Pell Grant program receive a rebate of up to $20,000.
In addition, former students will not have to continue paying off their loan until next year. Ex-President Donald Trump suspended payments because of the corona pandemic. This deferral program was supposed to expire at the end of August.
Average $37,667 in debt
Studying in the United States often costs enormous amounts of money.
Colleges often charge anywhere from $10,000 to $70,000 a year, leaving many students to borrow.45 million Americans have student debt with the state – a total of $1.6 trillion. According to a study by the US Department of Education, a typical bachelor’s degree owes around $25,000.
The average student debt is $37,667 per person. Almost a third of those affected owe less than $10,000, and about half owe less than $20,000.
The US government estimates that as a result of the plan, around 20 million alumni will no longer owe the state. The plan could be implemented before the mid-term elections in November – if it is not legally challenged.Criticism of the debt relief comes from some economic experts: They fear that the additional purchasing power could fuel inflation further.