A tweet by Bernie Sanders, a senator from Vermont and chairman of the Senate Budget Committee, reveals the student loan crisis in America. He wrote, ‘How can it be that student loan refinancing company SoFI can spend $625 million to make its name visible in the LA Rams football stadium while 45 million Americans are in student debt of $18 trillion . Today could be a good day for the President to waive student loans.
Credit cards and auto loans
Student debt in the country is $1.8 trillion, which is more than credit cards and auto loans. Average debt on a bachelor’s degree student has tripled in the past three decades. Three decades ago it was 10 thousand dollars which has now reached 30 thousand dollars. More than a quarter of those who have taken student loans are believed to have defaulted.
Loans have never been forgiven in America before. Experts say that after the financial crisis in 2008, the tax on mortgages was waived. President Joe Biden in his election campaign promised to waive student loans of up to $10,000. If the government does so, it will incur a burden of about $377 billion, but it will reduce the number of people immersed in student debt to about 30 million.
how much will be the burden
Several opposition lawmakers are demanding a loan waiver of up to $50,000. This will put a burden of $ 1.049 trillion on the government, but then only 8 million Americans will be left with student loans. Waiving off the full student loan would cost the government $1.8 trillion and there would be no federal student loan borrower after that. In the US, 40 to 50 lakh people take student loans every year.
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