The American president announces his decision to partially erase the colossal student debt, on August 24, 2022 at the White House in Washington (AFP / OLIVIER DOULIERY)
A “responsible and fair” project: Joe Biden on Wednesday defended his decision to partially erase the colossal student debt weighing on his fellow citizens, facing the Republican opposition who accuses him of stoking inflation.
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.
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.
US Secretary of Education Miguel Cardona during President Joe Biden’s announcement of the partial forgiveness of student debt on August 24, 2022 at the White House in Washington (AFP/OLIVIER DOULIERY)
The debate on student debt was particularly lively, as it is every time in the United States to transfer to the public power spending that until then was private, whether for health or education.
It took more than a year and a half for the White House to calibrate its plan and find a legal basis for its action.
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 considered rather close to the Democratic camp, considered that this substantial financial gesture was risky at a time when the United States is already facing soaring prices.
Inflation in the United States (AFP/Archives/Eléonore HUGHES)
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 anywhere from $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.
The promise of student debt relief “is the reason why many people of my age and my generation voted for him, because it is something that affects us heavily”, reacted Amarie Betancourt, 20, second-year student at Howard University in Washington, who took out a loan to finance her studies.
“Student debt is an important subject that worries many students,” said Vivian Santos-Smith, 20, who studies political science at the same private university, historically linked to the African-American community. “It’s already a blessing if a game is canceled.”
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.
© 2022 AFP
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