For millions of Americans earning less than $125,000 per year, US President Joe Biden will cancel up to $10,000 (£8,474) in federal student loans.
President Biden will also forgive $20,000 in debt for Pell Grant recipients, with priority given to those in the greatest financial need.
“People can finally crawl out from under that debt mountain,” he said.
An estimated 43 million Americans owe $1.6 trillion in federal student debt.
One-fifth owes less than $10,000.
The temporary student loan pause, which was implemented in March 2020, will be extended for the final time until December 31, this year.
President Biden said from the White House on Wednesday that his plan would give working and middle-class families more “breathing room.”
“The burden is so heavy that even if you graduate, you may not have access to the middle-class life that a college degree once provided,” he said, recalling the shame his car salesman father felt when he couldn’t afford his children’s education.
According to President Biden, roughly one-third of borrowers have student debt but no degree. “The wretchedest of both worlds.”
On Wednesday, Mr. Biden responded to the criticism, saying his student loan forgiveness plan is the “economically responsible course.”
“I will never apologize for assisting working Americans and the middle class,” he said, adding that “this action will benefit no high-income individual or high-income household.”
Debt cancellation, according to Republicans and some moderate Democrats, will increase inflation by giving Americans more money to spend. Others argue that blanket debt forgiveness is unjust to people who have already paid off their student loans.
House Minority Leader Kevin McCarthy, a Republican from California, slammed the plan on Twitter right away: “Who will be held accountable for Biden’s debt-transfer scheme? Working-class Americans who have already paid off their debts or have never taken on student loan debt in the first place, “He wrote something.
Some Democratic lawmakers have argued that canceling student loans helps to address economic and racial disparities.
Black students are more likely than other Americans to borrow federal student loans, and they borrow more money. According to a Brookings Institution study, black borrowers owe nearly $25,000 more than their white counterparts four years after earning bachelor’s degrees.
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