Biden’s Bifurcated Student Debt Cancellation Plan

Jack Rasmus

Today, August 24, 2022 President Biden announced his long-awaited plan to alleviate in part the burden of nearly $2 trillion carried by 45 million American students and former students. The official figure for student loan debt is $1.7 trillion. But when private bank loans and parent loans are considered, the total is around & 1.9 trillion, with an average student debt of $37,000.

In recent decades the cost of college education has tripled while the support for it from US states has declined sharply. Moreover, what started out as grants in aid for students steadily migrated to banks and private financial institutions loan debt. About 90% of the $1.9T debt is held by the US government; the remaining by private sources.

One of the most unpleasant arrangements in the current structure of student debt in the US is the government charges interest rates for it that are much higher than…

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