The United States is in turmoil following a dramatic move by President Biden who announced a far-reaching plan, in which the debts of tens of millions of Americans will be completely or partially erased – debts that they accumulated when they took loans from the federal government in order to finance their studies at institutions of higher education. According to reports in the American media, the cost The plan is estimated at at least $400 billion, and may even reach $600 billion.Democrats hope that the move will help them in the midterm elections in a little more than two months.
According to the plan, the federal government will write off $10,000 from the debts of every American whose annual salary is up to $125,000, and debtors who borrowed the funds under a special program for those facing severe financial hardship will be able to get a $20,000 debt write-off. Biden also announced his intention to apply a new regulation under which borrowers will not be required to pay more than 5% of their salary in order to repay their debt, as opposed to 10% as it was until now, and the remaining debt will be completely erased after 10 years of payments, instead of 20 years today .
Biden said in a White House speech that “education is the ticket to a better life, but over time that ticket has become too expensive for too many Americans.” Biden added, “What this means is that an entire generation is now saddled with unbearable debt and receives, at least, a college degree in return. But the burden is so heavy that even if you complete the degree you won’t necessarily get the access to middle-class life that a college degree once provided.”
The Republicans were outraged by the move, according to them it is an election economy because in the near future mid-term elections will be held in the US, in which, among other things, representatives of the House of Representatives and the Senate will be chosen – and the Democrats fear losing the tiny majority they currently enjoy in Congress.
“Working families are buckling under the weight of President Biden’s inflation, and his answer is to give more government money to high-wage elites,” said Senate Minority Leader Mitch McConnell. “Democrats are literally using the money of working Americans to try and buy themselves enthusiasm among their political base.” The leader of the Republican minority in the House of Representatives, Kevin McCarthy, also attacked: “Who will pay for Biden’s debt swap scheme? Americans who work hard and have already paid their debts – or never took a loan.”