WASHINGTON, Aug 25 — President Joe Biden said on Wednesday the US government will forgive US$10,000 in student loans for millions of debt-saddled former college students, keeping a pledge he made in the 2020 campaign for the White House.
The actions are “for families that need them the most - working and middle class people hit especially hard during the pandemic,” Biden said during remarks at the White House. He pledged no high-income households would benefit, addressing a central criticism of the plan. Republicans mostly opposed student loan forgiveness, calling it unfair because it will disproportionately help people earning higher incomes.
White House Press Secretary Karine Jean-Pierre told reporters the administration has legal authority to forgive the debt under a law allowing such action during a national emergency such as a pandemic. Earlier, Republican US Representative Elise Stefanik had called the plan “reckless and illegal.” American university tuition fees are substantially higher than in most other rich countries, and US consumers carry US$1.75 trillion in student loan debt, most of it held by the federal government.
A New York Federal Reserve study shows that cutting US$10,000 in federal debt for every student would amount to US$321 billion and eliminate the entire balance for 11.8 million borrowers, or 31 per cent of them.A senior Biden administration official told reporters the plan could benefit up to 43 million student borrowers, completely canceling the debt for some 20 million.