US President Joe Biden announced Wednesday the forgiveness of up to $20,000 in student loans for those earning less than $125,000 a year. He also extended the moratorium on loan repayments in effect during the coronavirus pandemic until the end of the year.
The decision, announced Wednesday, fulfills one of Biden’s election promises. Under the plan, people who took out loans to pay for college will be able to reduce their debt by $10,000, or $20,000 if they were recipients of so-called Pell grants, or subsidies for students from poor families.
As announced by the White House, the debt relief will cover up to 43 million people, and will not apply to only the top 5 percent of income-earning Americans, i.e. those with incomes greater than $125,000 a year. At the same time, President Biden decided to extend until the end of the year the existing moratorium on loan repayment, originally imposed because of the Covid-19 pandemic.
Biden noted that the debt forgiveness is necessary due to, among other things, the rapid rise in the cost of higher education, which has increased by 300 percent over the past 40 years.
“I will never apologize for helping working Americans and the middle class,” he said. – The president said, referring, among other things, to criticism from Republicans. No one complained, he added, when loans of companies granted during the pandemic were forgiven. He also assured that the measure would not have a “significant effect” on inflation.
Earlier, Senate Republican leader Mitch McConnell described the president’s plan as a “wildly unfair redistribution of wealth” in favor of the wealthier.
“Democrats are literally using the money of working Americans to buy themselves some enthusiasm from their political base,” he – the politician said. In turn, some politicians on the left criticized Biden for saying that the announced plan is only a drop in the ocean of needs.
According to the White House, the total value of student loan debt is $1.6 trillion, while 45 million people have taken out loans. The average annual cost of college tuition, is about $21,000.