Facing generally low approval ahead of the midterms, Biden is hoping to get young voters on his side. The plan would cancel $10,000 in student debt for millions of Americans.
Student debt cancellation has been a key campaigning point for the left wing of the Democratic Party
Millions of people saddled with thousands of dollars in student debt were expecting US President Joe Biden to grant them some financial relief on Wednesday, as he was set to announce debt cancellation, delivering on one of his campaign promises ahead of the mid-term elections.
“In keeping with my campaign promise, my administration is announcing a plan to give working and middle class families breathing room,” Biden said in a statement.
While the full details are expected to be announced later, the plan would wipe $10,000 (€10,022) for many, and a further $10,000 for those whose income falls below $125,000, according to sources cited by agencies and US media.
Biden will also extend a moratorium on student loan payments until the end of the year — but for the “final time” according to the White House.
How much student debt does the US have?
Former students — and current consumers — carry a massive $1.75 trillion in student debt. According to federal data, some 43 million people are burdened with an average debt of $37,667.
The White House estimates that the debt relief could completely erase the student debt of some 20 million people who owe less than $20,000.
The Brookings Institute said in a study that debt cancellation would reduce the income gap between white and Black earners, with the latter tending to owe, on average, $25,000 more due to their need to borrow more in the first place.
Some Democrats have called for debt forgiveness of up to $50,000 to enable younger people to save up for bigger purchases such as down payments for a house!
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