A "responsible and fair" project: Joe Biden defended his decision on Wednesday August 24 to partially erase the colossal student debt weighing on his fellow citizens.

The Democratic president, who is taking up a campaign promise there, assured that his plan "would above all benefit families of the middle and working class".

The measure, announced less than three months before traditionally tough midterm elections for the presidential party, affects people earning less than $125,000 a year.

It erases 10,000 dollars for people who have not received a federal scholarship for their university studies, and 20,000 dollars for those with more modest means who have received one.

Tune in as I deliver remarks on my plan to bring student loan debt relief to the millions of borrowers who need it the most.

https://t.co/aZCrbeOH7k

— President Biden (@POTUS) August 24, 2022

According to an estimate by the University of Pennsylvania, erasing $10,000 alone would cost some $300 billion.

The expense is worth it not only for issues of social justice, but also for “America to win the economic competition of the 21st century” through education, justified Joe Biden during an address at the White House .

"How do we finance it? By what we have done", namely reducing the deficit, he also argued.

"Middle Class Joe"

Once again playing his "Middle Class Joe" card ("Joe of the middle class"), the 79-year-old Democrat wanted to oppose this project to the significant tax cuts decided by his predecessor Donald Trump for businesses.

The decision was hailed by figures in the Democratic Party.

Senators Chuck Schumer and Elizabeth Warren spoke in a joint statement of "a giant step towards resolving the student debt crisis".

Senate Republican leader Mitch McConnell, on the other hand, did not have harsh enough words against an "incredibly unfair" measure.

"It's a slap in the face for all the families who have made sacrifices to save for college, for all the graduates who have repaid," he said in a statement.

Oil on the fire

Some experts, including those considered to be rather close to the Democratic camp, considered this substantial financial gesture to be risky at a time when the United States is already facing soaring prices.

Jason Furman, former economic adviser to Barack Obama, thus estimated on Twitter that he was "unconscious of throwing around 500 billion dollars of oil on the fire of inflation which is already blazing".

The chief economist of the Moody's agency, Mark Zandi, on the contrary estimated that the impact of this debt relief on growth as on inflation would be "marginal".

The measure should be received with relief by many, in a country where universities can charge $10,000 to $70,000 a year.

In total, some 45 million borrowers in the country collectively owe $1.6 trillion, according to the White House.

Joe Biden, however, stressed that the moratorium on the repayment of student loans, introduced during the Covid pandemic, would end at the end of the year and that it will therefore be necessary thereafter, after deducting the aid announced on Wednesday, to resume refunds.

With AFP

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