The US government is going to cancel some of the student loans of millions of students. President Joe Biden announced Wednesday.
Students and alumni earning less than $125,000 a year will receive $10,000 off their student loans. Students receiving additional grants due to financial need may waive up to $20,000.
They can freeze their installments till the end of the year. During the corona pandemic, former students were already able to temporarily interrupt their student loan repayments. That provision was due to expire at the end of August, but has now been extended to December 31.
For at least 11 million Americans, their entire student loan debt will disappear as a result of the decision. The total amount waived was $321 billion. According to Biden, 90 percent of debt relief goes to low-income people.
45 million Americans carry $1.75 trillion in student debt. By comparison: In the Netherlands, combined student debt rose to 24.4 billion euros last year. Student debt is relatively high in the US because the average tuition is higher than in other countries. The US government is the largest lender.
The government hopes that (former) students will spend that money on other things, thus stimulating the economy. Through this, high inflation can be tackled. Biden hopes the decision will garner youth support for the midterm elections (Middle Ages) Nov.
In keeping with my campaign promise, my administration is announcing a plan to give working and middle-class families a breather as they prepare to resume federal student loan payments in January 2023. I will have more details this afternoon.
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