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The debate over massive student debt relief in the United States is back on the table these days. After months of legal challenges, the measure is now being reviewed by the nation’s highest court, the Supreme Court.
Putting it into context: US President Joe Biden announced a plan last August to cancel hundreds of billions of US dollars in student debt. The measure, announced less than three months before the midterm elections, would wipe out US$10,000 of debt for people earning less than $125,000 and up to $20,000 for those who went to college thanks to income-based Pell grants.
But the millions of borrowers are currently in uncertainty, while the very conservative Supreme Court is currently deliberating on the legitimacy of the measure. Last Tuesday, a majority of its magistrates appeared to believe that the Democratic administration had exceeded its powers by adopting this extremely expensive program without explicit authorization from Congress.
The Biden administration’s pardon plan is expected to have a huge impact on the pocketbooks of millions of Americans. The nonpartisan Congressional Budget Office calculated that debt cancellation would eliminate about $430 billion of the $1.6 trillion in student debt and that more than 40 million people could benefit. .
Here are some keys to understanding the magnitude of the measure and its effect on millions of Americans.
Student loan debt in the United States is $1.757 trillion. It is the second category of consumer debt, after mortgages.
As of February 2023, 43.5 million borrowers have federal student loan debt. The average federal student loan debt balance is $37,574.
According to Federal Student Aid data, only 15 million (32%) of students with loans had a balance of less than $10,000 on their federal debt.
Bachelor’s degree holders have an average federal student loan debt of $34,800.
55% of Americans support forgiveness of up to $10,000 per federal student loan borrower.
More than 25 million people signed up for the Biden administration’s loan relief plan before applications were put on hold. The Supreme Court, which has a 6-3 conservative majority, will make a final decision on the issue in June.
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