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The student loan bubble ‘is going to burst

A young American man holds up a dollar sign during an Occupy Wall Street rally against the high cost of college tuitions April 25, 2012 in New York. Scores of students and former students gathered to complain about the high cost of tuitions and college loans. April 25th marked the day when US student debt reached USD 1 trillion.

Demands to cancel debt were a rallying cry for Occupy Wall Street activists, but the idea has now become mainstream
Cancelling student debt was once a fringe idea in the US, but as loans mount, it’s become increasingly mainstream.

For her birthday this year, Alicia Davis received one of the best gifts ever: word that roughly $20,000 (£14,500) of her student debt would be erased.

It’s a massive relief, resolving an issue that has drawn threats from debt collectors, raised questions in job interviews and ruined her credit, making it difficult to do things like buy a car.

“This is the best birthday present,” the 38-year-old recalls thinking. “I’m able to function in society now.”

The forgiveness came after the Department of Education in March agreed to fully cancel debts from borrowers, like Alicia, who had proven to officials that their schools had misled them about things like cost and employment prospects.

The move was among a series of steps the Biden administration has taken to address America’s rapidly mounting student debt, which hit $1.7 trillion (£1.2tn) last year. But he faces pressure from his party to do far more.

Senate Majority Leader Chuck Schumer (D-NY) holds a news conference to reintroduce a resolution to cancel up to $50,000 of student loan debt, at the Capitol in Washington, U.S., February 4, 2021.
Chuck Schumer at a news conference to reintroduce a resolution to cancel up to $50,000 of student loan debt
Top Democrats, including Senate Majority Leader Chuck Schumer, have called on the president to use his power to wipe out borrower debts up to $50,000…Read More from BBC

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