US to Forgive at Least $108 Billion in Student Debt

The United States plans to forgive at least US$108 billion in student debt in coming years, according to a report that for the first time projects the full cost of plans that tie borrowers’ payments to their earnings, The Wall Street Journal reported Wednesday.

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The announcement is expected to be published soon by the Government Accountability Office. The move is seen as a huge spending blowout by the administration of President Barack Obama, whose strategy to help student-loan borrowers has been much more expensive than expected.

Enrollment in the plans has more than tripled in the past three years to 5.3 million borrowers as of June — or 24 percent of all former students who borrowed directly from the government and are now required to make payments. They collectively owe US$355 billion.

According to official figures, around U.S. 44 million students owe a total of nearly US$1.3 trillion in student loan debt.

Access to higher education in the United States is very expensive and is seen by many as a luxury afforded only to the wealthy or those willing to mortgage their futures through massive student loan debt.

Congress approved the plans in the 1990s and 2000s, and President Barack Obama has used executive actions to extend the most generous terms to millions of borrowers. Since his last administration, Obama has worked hard to help borrowers avoid defaults.