Key Takeaways:
- US President Joe Biden has partially forgiven the student loans for 43 million students
- As per the decision, the Government will write off $10,000 or $20,000 from debters
- Bitcoin (BTC) and crypto supporters see this as good news for cryptocurrencies
YEREVAN (CoinChapter.com) — US President Joe Biden announced this week that his Government will forgive student debt to the tune of $10,000 and $20,000. The decision, which had ignited a debate in the country, is seen to be bullish for Bitcoin (BTC) and cryptocurrencies.
What did Biden say about forgiving student loans?
President Biden had promised during his election campaign that he would partially forgive student loans if elected. On Wednesday, he made good on that promise.
In his address to the nation, Biden informed that he has decided to knock off $10,000 from student debt for millions of students from families that make less than$125,000 per year. The decision could benefit as many as 43 million borrowers.
“Using the authority Congress granted to the Department of Education, we will forgive ten thousand (dollars) in outstanding Federal student loans,”
Biden announced.
Moreover, he also made clear that those students who come from low-income families will receive an additional $10,000 reduction. In total, their debts will reduce by $20,000.
However, this will only apply to those students who received the Pell Grant, a type of Government aid available for low-income undergraduate students.
According to the White House, over 45 million students owe $1.6 trillion in cumulative federal student loan debt.
President Biden also announced that he has extended the suspension on student loan repayment for the final time. The new date is 31 December 2022.
As CoinChapter earlier reported, the suspension first came about two and a half years back under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. It has since been subjected to multiple extensions by former President Donald Trump and current president Joe Biden.
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Why are Bitcoin (BTC) and crypto supporters bullish?
Ever since news broke that President Biden plans to forgive student debt, many of his political opponents have slammed the move. According to many, the decision to pass the bill for these students to the taxpayers is unfair.
Moreover, others have alleged that the move will make inflation worse in the US.
Against the backdrop of such raging debate, Bitcoin (BTC) supporters have found a silver lining. The cracks in the traditional financial system come as a strong argument for the adoption of cryptocurrencies.
“Biden canceling student debt just goes to show how little value the USD has, if you can erase it, print it on demand, or use it to manipulate votes, it isn’t scarce or worth holding. Bitcoin is a solution,”
author and entrepreneur Richard Copper said.
Perhaps the biggest argument for blockchain technology lies in the fact, that traditional agreements and contracts can be easily canceled or invalidated. The US president’s decision to render agreements between private parties obsolete raises a red flag for the financial sector.
BTC, however, seems to have hit a roadblock. According to data available on CoinMarketCap, BTC price has started falling. At the time of writing, it exchanged hands for $20,658, down from nearly $21, 800 yesterday.
Meanwhile, Bitcoin fans hope to see the token’s price soar in the coming weeks. Will it happen? Time will tell.
