BIDEN FORGIVES MILLIONS OF STUDENT LOANS; CRITICS FEAR INFLATION

BIDEN FORGIVES MILLIONS OF STUDENT LOANS; CRITICS FEAR INFLATION

BIDEN FORGIVES MILLIONS OF STUDENT LOANS; CRITICS FEAR INFLATION

President Joe Biden said on Wednesday that the US government would forgive $ 10,000 in student loans for millions of former students who were placed in debt, keeping a commitment he made during the 2020 campaign for the White House.

This step can increase support for fellow Democrats in the November congressional election, but some economists say they can trigger inflation, and some Republicans in the US Congress question whether the President has the legal authority to cancel debts.

The forgiveness of the debt will release hundreds of billions of dollars for new consumption expenses which could be intended for home buying and other large tickets, according to economists who said that this would add a new wrinkle to the country’s inflation struggle.

Actions are “for families who need it most – people who work and the middle class are particularly hitting hard during the pandemic,” said Biden in the White House remarks. He has promised no high-income housework would benefit, to tackle a central criticism of the plan.

“I will never apologize for helping the Americans and the middle classes, especially not to the same people who voted for a tax reduction of 2 billion dollars who mainly benefited the richest Americans and the largest companies, “Said Biden, referring to a republican tax reduction was adopted under former President Donald Trump.

The borrower balances have been frozen since the beginning of the COVID-19 outbreak, without paying payments in most federal loans for students since March 2020. Many Democrats had pressed Biden to forgive up to $ 50,000 per borrower.

Republicans mostly opposed the forgiveness of student loans, calling it unfair because it will disproportionately help people who obtain higher income.

“The socialism of President Biden’s student loan is slapped in the face of each family who sacrificed to save for the university, each graduate who paid their debt, and all Americans who chose a certain professional career or offered to serve in our Armed Forces to avoid taking debts, “Senate Leader Mitch McConnell said Wednesday.

The administration has not yet determined the price label for the package, which will depend on how many people have submitted an application for it, the Domestic Policy Advisor of the White House Susan Rice told reporters. Student loans obtained after 30 June this year did not meet the requirements, he said.

The White House press secretary Karine Jean-Pierre told journalists that the administration had the legal power to forgive debt under a law allowing such an action during a national emergency like a pandemic. Earlier, the American Republican Republican Elise Stefanik qualified the plan as “reckless and illegal”.

American university tuition fees are far higher than in most other rich countries, and US consumers carry $ 1.75 trillion in student loan debt, mostly held by the federal government. Biden said that other countries could pass through the United States economically if students were not offered economic assistance.

BIDEN FORGIVES MILLIONS OF STUDENT LOANS; CRITICS FEAR INFLATION