Biden administration announces further student loan forgiveness

WASHINGTON: US President Joe Biden’s administration revealed the cancellation of an additional 150,000 student loans, raising the total number of borrowers receiving relief to over $5 million since the start of his presidency.

The latest initiative includes 85,000 people who were defrauded by their educational institutions, alongside 6,000 pubic service employees and 61,000 borrowers with private student loans.

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As of the second quarter of 2024, the total student loan debt in the world’s largest economy stood at an estimated $1.74 trillion. This marks a decline of 0.96 per cent compared to the same period in 2023.

The student debt crisis remains a pressing issue, particularly as disparities in debt levels are evident across various demographics within the North American country.

As per the Education Data Imitative, African American families carry the highest levels of student loan debt relative to other racial groups.

The financial strain of student loans is especially significant for graduate students, with 66 per cent of the group relying on laons to fund their education.

While advanced degrees can lead to higher income potential, they also result in greater debt accumulation, often at elevated interest rates.

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According to reports, federal student loans issued to students pursuing bachelors in the US in current fiscal year will have an interest rate of a whopping 6.53 per cent, while loans for masters will incur a higher rate of 8.08 per cent!