The topic of student loans has been a long discussed one for the last half of the year. Dealing with student debt has become a top priority for Biden administration, especially since the 3.5-year pause in student loan repayment, launched due to Covid, had lapsed. Now, thanks to the efforts of the White House, $127 billion in student debt loans were finally forgiven relieving around 3.6 million Americans from the financial burden they carried for years.
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Key Takeaways
- The Biden administration has canceled $127 billion in student debt, benefiting around 3.6 million Americans, with specific categories outlined for forgiveness, including public servants, those with permanent disabilities, and those misled by educational institutions.
- President Biden highlighted the broader economic impact of the debt cancellation, emphasizing that relieving Americans of student debt will benefir the U.S. economy.
- Despite the positive aspects of the ruling, it has been met with criticism. Detractors argue that the debt burden will shift to other taxpayers, and some claim it’s a political move by the Biden administration, with others challenging its constitutionality.
As Biden confirmed, around 3.6 million Americans were positively impacted by the ruling to forgive student loan debt. The White House’s official website offered a breakdown showing categories of US citizens elligible for forgiveness:
- $42 billion has been allocated for roughly 855,000 borrowers. This correction is due to historical inaccuracies in payment counts that qualify for forgiveness under income-driven repayment plans.
- Public servants will see a relief of $51 billion, aiding 715,000 individuals via the Public Service Loan Forgiveness programs.
- Borrowers who have a total and permanent disability are set to receive $11.7 billion, assisting approximately 513,000 individuals.
- Lastly, over 1.3 million borrowers who were misled by their educational institutions, experienced abrupt school closures, or are beneficiaries of relevant court settlements will be granted a total of $22.5 billion in debt relief.
This rulling is called to help Americans reach financial stability and positively impact the economy of the U.S. in general. As Biden said in his speech during the announcement of additional $9B in student debt relief:
“This kind of relief is life-changing for individuals and their families but it’s good for our economy as a whole as well. Freeing millions of Americans from the crashing burden of student debt means that they can go and get their lives in order, they can think about buying a house, they can start a business, they can be starting a family. It matters.”
It’s important to state the situation with student debt in America wasn’t looking too bright for many people. 45 million Americans owe $1.6 trillion in student debt, with an average person having to make a monthly payment of around $203 to repay that outstanding debt. For some, this sum even reached around $800/month.
Considering the situation, the White House has even hinted that there may be more help on the way, with another program entering the rule-making process that would forgive up to $20.000 in student loans for many Americans.
Social Response
Despite the obvious benefits of the rulling for many US citizens, not all were relieved to see these financial aid programs come in place. Many argue that this debt will now be simply transfered on other tax payers, who worked hard to close their loans and get to the level of income they have.
Others have pointed out that this is just a move coming from Biden Administration to gain more votes for future election campaign. Some people even said that the rulling was unconstitutional since it wasn’t approved by the Supreme Court.
In the ned, it’s only left to wait and see how this decision will really impact the lives of regualr Americans and the economical situation of the country in general.
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