US president Joe Biden is considering a substantial relief and a pause for several months on student loans ahead of November midterms.
The current pause on the loans will expire on the 31st of August, which the president is planning to extend either through 2022 or till next summer. According to Bloomberg, Biden is also considering a $10,000 relief program per borrower.
The debt forgiveness program is designed to not benefit wealthier people. In order to be eligible for the relief, the borrower’s annual income should be lower than $125-150 thousand. The final decision has not been made yet and details are still to be considered.
The current US student loan debt accounts for $1.762 trillion for 43.4 million borrowers. If just this debt was an economy, it would rank 12th worldwide, ahead of Brazil ($1.6 trillion) and behind Russian Federation ($1.77 trillion). If the bill gets approved, it would cost the US government over $400 billion.
Civil rights organizations, like NAACP, have been known to press Biden to forgive $50,000 per borrower. The average debt is between 30 and 40 thousand dollars per borrower, effectively making this request nearly a full relief program.
Source: Bloomberg
