More than 43.4 million U.S. residents continue to pay off debts on loans taken out for higher education.
The U.S. Department of Education canceled student loan debt for 40,000 people and offered assistance to 3.6 million more debtors to repay loans under a plan announced Tuesday that is designed to help low-income borrowers and government employees.
“Student loans have never been a life sentence, but it is definitely felt by borrowers deprived of the right to write off debts,” Education Minister Miguel Cardona said in a statement.
During the 2020 presidential campaign, Joe Biden called for the cancellation of student loan debt in the amount of $10,000 to each borrower, which would amount to more than $400 billion. After Biden’s election victory, the White House said that Congress should take measures to help people who are unable to pay off loans taken for studies.
The debts of at least 40,000 borrowers will be immediately written off as part of the loan forgiveness program for public services.
Several thousand borrowers with long-term loans will also receive forgiveness in the form of write-off payments depending on their income, and another 3.6 million debtors will receive at least three additional annual loans to write off debt.
Student loan debt is seen as a drag on the economy, burdening young professionals for many years after graduation from educational institutions.
According to the Education Data Initiative, 43.4 million Americans are currently in arrears on student loans, the average amount of debt is more than 37 thousand dollars.
The Biden administration wrote off more than $17 billion in debt for 725,000 borrowers in its first year in office, and also extended a pause in loan repayment, which provided at least temporary assistance for 41 million borrowers, the Ministry of Education reported.