WATCH: Biden’s unprecedented move to cancel student debt

US President Joe Biden has made history by cancelling billions in student loans.

On Wednesday, the 79-year-old announced a sweeping package of student debt relief that forgives as much as $20,000 in loans for some recipients.

Some reprieve for a generation caught in spiralling debt

Biden said the move would help a generation ‘saddled with unsustainable debt’.

The package forgives $10 000 of student loan debt for borrowers making less than $125 000 per year.

“The burden is so heavy that, even if you graduate, you may not have access to middle-class life that the college degree once provided,” Biden said during a White House briefing.

“I made a commitment that we would provide student debt relief. And I’m honouring that commitment today,” he added.

There will also be a four-month extension of the moratorium on student loan repayments and plans to allow borrowers with undergraduate loans to cap repayments at 5% of their monthly income.

Biden’s move welcomed, but more can be done

Political pundits predict the measures should curry favour with younger and progressive voters.

The move is expected to provide relief for up to 43 million borrowers and target relief for low- and middle-income borrowers.

The White House said in a statement that the total cost of both four-year public and private colleges has nearly tripled, even after accounting for inflation.

But federal support has not kept up.

Pell Grants once covered nearly 80% of the cost of a four-year public college degree for students from working families but now only cover a third.

That has left many students from low- and middle-income families with no choice but to borrow if they want to get a degree.

Some economists, meanwhile, even those who have worked in Democratic administrations, argued that cancelling student debt could further spike inflation and inflate the national debt.

Compiled by Narissa Subramoney

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