President Joe Biden announced relief for student borrowers Wednesday, action that will ease the student loan debt burden for millions of Americans and cost taxpayers an estimated $300 billion in money they effectively lent out that will never be repaid, the New York Times reports.
Borrowers who earn less than $125,000 a year ($250,000 for married couples) will have $10,000 of their student loan debt cancelled. The government will cancel $20,000 in debt for those who received Pell grants.
“All of this means people can start finally to climb out from under that mountain of debt,” Mr Biden said in remarks from the White House. “To finally think about buying a home or starting a family or starting a business. And by the way, when this happens the whole economy is better off.”
If you make under $125,000, you're eligible for up to $10,000 in student loan debt relief.
And almost ninety percent of the benefit will go to folks making less than $75,000 a year.
— President Biden (@POTUS) August 24, 2022
Criticism for the idea came from both sides of the political aisle. Some Democrats wanted the government to forgive more debt for each borrower, while some others, including many Republicans, expressed concern that the loan forgiveness would put pressure on prices, as borrowers increase spending, and boost inflation.
Biden’s reckless action today will only cause more skyrocketing inflation. This is a really bad idea at the worst possible time.
Washington should focus on making college more affordable, not making inflation worse. pic.twitter.com/GhCnUc3mlz
— Larry Hogan (@LarryHogan) August 24, 2022