• Student debt is owed by 43 million Americans, amounting to $1.6 trillion in total.
• Joe Biden will waive up to $10,000 in federal student loans for borrowers making less than $125,000.
• For students receiving Pell Grants, he will waive $20,000 in debt.

For millions of Americans who make less than $125,000 annually, US President Joe Biden will forgive up to $10,000 (£8,474) in federal student loans.

For students receiving Pell Grants—those with the greatest financial need—Mr. Biden will also waive $20,000 in debt.

“People can finally crawl out under that mountain of debt,” he said.

Federal student debt is owed by 43 million Americans, amounting to $1.6 trillion in total.

One-fifth or less owe less than $10,000.

The temporary student loan halt, which was initially implemented in March 2020, will also receive one final extension until December 31 of this year.

On Wednesday, Vice President Biden stated in remarks from the White House that his proposal would provide working- and middle-class people more “breathing room.”

“The burden is so heavy that even if you graduate you may not have access to the middle class life that the college degree once provided,” he added, remembering the guilt his car salesman father felt when he battled to pay for his children’s education.

According to Mr. Biden, one-third of debtors do not have degrees but do have student debt. “The worst of both worlds.”

After an extended period of heated internal debate within the White House and increasing pressure from progressive Democrats, the announcement was made. Leading Democrats Senators Elizabeth Warren of Massachusetts and Chuck Schumer of New York asked Vice President Biden to utilise his presidential authority to forgive borrower debts.

The proposal from Wednesday falls short of the $50,000 per borrower request made by Mr. Schumer and Ms. Warren.

The Penn Wharton budget model at the University of Pennsylvania estimated that a one-time cancellation of $10,000 for each borrower earning up to $125,000 would cost the federal government about $300 billion.

On Wednesday, Mr. Biden responded to this criticism by asserting that his idea for student loan forgiveness is the “economically responsible course”.

“I will never apologise for helping working Americans and the middle class,” he said, adding that “no high-income individual or high-income household will benefit from this action”.

According to Republicans and some moderate Democrats, debt elimination will increase inflation since it will give Americans more money to spend. Others claim that granting universal debt forgiveness is unfair to people who have already repaid their education loans.

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