US President Joe Biden announced that the US government will provide forgiveness of about $10,000 in student loans to millions of debt-burdened former college students, fulfilling a pledge he made while running for president in 2020.
Reuters said the move could boost the blood of Democrats in the midterm elections next November, but some economists warn it could spark inflation, and some Republicans in Congress have questioned whether the president has the legal authority to cancel the debt.
Debt forgiveness would free up hundreds of billions of dollars in new consumer spending that could target expensive home purchases and other expenses, according to economists, who said this would add difficulty in the United States' fight against inflation.
Biden said, in statements to the White House, that these measures are for families who desperately need them from the middle and working classes who were most affected during the Corona epidemic. He pledged not to benefit high-income families, something that has been a major criticism of the plan.
Biden continued, saying: I will never apologize for helping working Americans and the middle class, especially not to the same people who voted for a two trillion dollar tax cut, which mainly benefited the wealthiest Americans and big companies, speaking of Republicans passing a tax cut under former President Donald Trump. .
Youth Support
For its part, Republican Rona McDaniel said that this measure "unfairly punishes Americans who save for college studies, or choose a different career path"
Before the decision was announced, Reuters said the move could restore dwindling support from young voters who backed Biden in the 2020 presidential election.
American consumers are incurring a huge $1.75 trillion in student loan debt, much of it owned by the federal government, as a result of private and state-subsidized college tuition, which is much higher than in most other rich countries.
The administration also extended the suspension of student loan payments until the end of the year, after the temporary government pause for student loans and pandemic-related payments was scheduled to end at the end of August.
Borrower balances have been frozen since the start of the coronavirus outbreak, with no payments required on most federal student loans since March 2020.
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