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Biden removes $10,000 in student loan debt for millions of people

Biden removes $10,000 in student loan debt for millions of people

Biden removes $10,000 in student loan debt for millions of people

Biden removes $10,000 in student loan

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  • Additionally, Mr. Biden will waive $20,000 in debt for Pell Grant recipients, who are those with the greatest need.
  • Federal student debt is owed by 43 million Americans, who collectively owe $1.6 trillion.
  • According to Mr. Biden, one-third of debtors have student debt but no degree.
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Millions of Americans who make less than $125,000 annually will get up to $10,000 (£8,474) in federal student loan cancellations from US President Joe Biden.

Additionally, Mr. Biden will waive $20,000 in debt for Pell Grant recipients, who are those with the greatest need.

Finally, he continued, “they can crawl out from beneath that debt mountain.”

Federal student debt is owed by 43 million Americans, who collectively owe $1.6 trillion. The majority of people owe less than $10,000.

A final extension will be made to the temporary student loan suspension, which was first implemented in March 2020, through the end of this year.

Speaking from the White House on Wednesday, Mr. Biden said his approach would provide working and middle-class Americans more “breathing room.”

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He recalled the guilt his car salesman father felt when he struggled to pay for his children’s education and remarked, “The weight is so high that even if you graduate you may not have access to the middle-class life that the college degree formerly provided.”

According to Mr. Biden, one-third of debtors have student debt but no degree. The worst of both situations

The statement comes after an extended period of heated internal debate within the White House and increasing pressure from progressive Democrats. Senators Elizabeth Warren of Massachusetts and Chuck Schumer of New York, both prominent Democrats, were among those who urged Mr. Biden to utilise his unilateral authority to cancel borrower loans.

The $50,000 per borrower plan that Mr. Schumer and Ms. Warren requested is less than Wednesday’s proposal.

According to an estimate from the Penn Wharton budget model at the University of Pennsylvania, a one-time cancellation of $10,000 for each borrower earning a maximum of $125,000 will cost the federal government about $300 billion.

On Wednesday, Mr. Biden responded to this criticism by arguing that his student loan forgiveness plan is the “economically sensible route.”

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No high-income individual or high-income household would profit from this measure, he added, adding that “I will never apologize for supporting working Americans and the middle class.”

Inflation will increase as a result of debt elimination, according to Republicans and some moderate Democrats. Others contend that a generalized debt forgiveness program is unjust to borrowers who have already repaid their school debts.

House minority leader Kevin McCarthy, a Republican from California, quickly criticized the plan on Twitter: “Who will have to pay for Biden’s debt transfer scam? Hard-working Americans who already paid off their debts or never took on student loan debt in the first place,” he wrote.

Democratic legislators objected, arguing that eliminating student loans would help reduce economic inequalities across races.

Compared to other Americans, black students are more likely to borrow federal student loans at higher rates. According to a Brookings Institution study, black borrowers owe, on average, over $25,000 more than their white counterparts four years after receiving bachelor’s degrees.

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