United States Presidential candidate, Joe Biden has weighed into the student loans forgiveness controversy saying he will create a program that offers $10,000 of undergraduate or graduate student debt relief for every year of national or community service, up to five years.
According to Mr Biden’s proposal “individuals working in schools, Government and other non-profit settings will be automatically enrolled in this forgiveness program; up to five years of prior national or community service will also qualify”.
Senior Fellow at the Urban Institute, Sandy Baum (pictured) said the policy was a positive step.
“One main benefit of this proposal would be that we would get more people to do public service work,” Professor Baum said.
“Tying loan forgiveness to some form of public service gives policy-makers the opportunity to create a sustainable and cost-efficient program while also providing work opportunities that could be particularly valuable for recent graduates,” she said.
Since President Donald Trump took office, the total amount of student loan debt held by Americans has increased more than 16 per cent from $US1.44 trillion ($A2 trillion) in 2017 to roughly $US1.68 trillion ($A2.35 trillion) today.
An estimated 46 million Americans have student loans, making it the second biggest form of household debt in the country.
These totals worry many economists, who say that student debt disproportionately impacts women, contributes to the racial wealth gap, puts younger generations at a disadvantage and holds the economy back.
A previous student loan forgiveness program, implemented by the Bush Administration in 2008, has been mired in bureaucratic mismanagement with just a tiny fraction of those who thought they were eligible receiving relief.
Washington, 26 October 2020