President Biden Cancels $9 Billion of Student Loan Debt
Newly inaugurated President Biden has issued an order to forgive $9 billion in student loan debt. For many Americans struggling to make ends meet, this announcement comes as a beacon of hope for their financial future. According to The New York Times, Biden’s latest move puts the spotlight on the student loan debt crisis, which has been plaguing the country for many years.
Overview of Student Loan Debt Crisis
The student loan debt crisis in the United States is a significant problem facing the country. With student loan balances poised to reach $2 trillion this year, more than 45 million people in the US carry student loan debts. The impact is staggering: borrowers are not only dealing with burdensome monthly payments, but they’re also spending less on other essential goods. All this while struggling in an economy plagued by job losses and economic insecurity.
President Biden’s Actions on Student Loan Debt
President Biden has previously outlined several proposals related to student loan debt relief, including instances on the campaign trail where he expressed a desire to cancel loans for students who attended public colleges and universities. The administration has also extended a moratorium on student loan repayments through September 2021, thereby giving borrowers more breathing room. In their recent announcement, the administration stated that $9 billion student loan debt would be forgiven, with a primary focus on borrowers who are defrauded by their schools.
Implications of Debt Cancellation
The cancellation of $9 billion in student loan debt has many implications, some of which are promising. For individual borrowers, this could mean incredible relief in their pockets. The cancellation would free many from oppressive monthly payments, allowing them to redirect their funds towards other necessities. Among the implications are the potential positive effects on the economy, including increased consumer spending and economic stimulus. Freed from burdensome monthly payments, borrowers would have more disposable income to spend.
Criticisms and Debate
Some individuals are not thrilled with this development, as a portion of those with student loans may not be eligible for the grant. Hence, critics argue that it leaves out a significant percentage of those bearing the brunt of student debt. That is even reinforced by variation in income and the increased disparities caused by the pandemic. Increasingly, those without degrees and