So weighed down have Americans become by student debt, and so potent a political issue has it become in the US, that President Joe Biden plans to waive interest or write off money owing byThe benefits, as he keeps telling anyone who will listen in the lead-up to the November election, are likely to be increased consumer spending, better mental health and credit scores for borrowers, and
In Australia and the United Kingdom and New Zealand and some other countries that have copied Australia's system, the loans areper year, meaning anyone who earns less than that doesn't need to repay a cent, perhaps forever if their income never climbs that high.If it becomes law, single Americans won't have to repay until they earn $US32,800. For an American supporting a family of four, the threshold will be $US67,500. It will be an Australian-style system.
Here's how it works for tax: on our first $18,200 of income we pay nothing, then we pay 19 cents in the dollar forwe earn up to the next threshold, and so on. The key words here are "for each extra dollar". We continue to pay nothing on the first $18,200 we earn. That economist, Bruce Chapman, has suggested a redesign that would require collections only on extra rather than total incomes, a proposal the report to the government endorses.