What Joe Biden Can Learn About Student Debt From the World

Bloomberg Quicktake: Now published this video item, entitled “What Joe Biden Can Learn About Student Debt From the World” – below is their description.

On his first day in office, President Joe Biden directed the Department of Education to extend the current freeze on student-loan payments until at least September.

But Democrats are pushing him to go further — and to take inspiration from abroad.

Dismayed that educational debt relief wasn’t mentioned in his $1.9 trillion stimulus proposal, members of Biden’s party have pushed him to use executive action to forgive $50,000 in student debt early in his presidency. Meanwhile the Democrats’ left flank loves to cite Nordic countries — with free college and generally lower student-debt levels — as policy models.

But some experts say the incoming president might have better luck looking elsewhere.

“The U.S. has a lot to learn from Australia and England,” said Lorraine Dearden, a professor of economics and social statistics at University College London who co-authored a recent study on the subject.

Like the U.S., both countries charge for higher education, and many of their students rely on student loans. But a few major differences make borrowing easier to manage.

One of the biggest: the way loans are structured. In the U.S., student loans function like mortgages. Borrowers have a fixed monthly payment over a set period of time.

But in England and Australia, loan repayments are dependent on a borrower’s income. Repayments only start once a borrower has reached a certain income threshold — and stop if a borrower loses a job.

The duration of the loan is variable, so loans can take longer to pay off than in the U.S. But because repayments are tied to employment, they tend not to dominate graduates’ job choices and financial lives as they can in the U.S. (Of course, the U.S. does have some income-contingent repayment plans. But these are complex and do not form the organizing principle of debt in the country.)

With that in mind, here is how Australia, the U.K. and several similar English-speaking countries handle educational loans, with insights from local advisers on how student debt fits into their clients’ financial lives.

Bloomberg Quicktake: Now YouTube Channel

Got a comment? Leave your thoughts in the comments section, below. Please note comments are moderated before publication.

About This Source - Bloomberg QuickTake: Now

Bloomberg L.P. is a privately held financial, software, data, and media company headquartered in Midtown Manhattan, New York City.

It was founded by Michael Bloomberg in 1981, with the help of Thomas Secunda, Duncan MacMillan, Charles Zegar, and a 12% ownership investment by Merrill Lynch.

Recent from Bloomberg QuickTake: Now:

  • Families of Kabul Airport Victims Plead for Justice From U.S.
  • How Will Voters React to Scenes of Border Agents and Haitian Migrants?
  • UN Chief Guterres Warns World Faces ‘Greatest Cascade of Crises’ Yet
  • In This Story: Democrats

    “Democrats” usually refers to the The Democratic Party of the United States – one of the two major political parties in the country, along with its main, historic rival, the Republican Party.

    It was founded on 8th January 1828 and has its contemporary headquarters in Washington, D.C., United States. The present leadership is Nancy Pelosi (Party leader) and Jaime Harrison (Party chair).

    2 Recent Items: Democrats

  • German elections: Merkel in constituency to boost would-be successor • FRANCE 24 English
  • Biden Juggles Crises as House Readies Funding, Debt Showdown
  • In This Story: Joe Biden

    Joe Biden is an American politician serving as the 46th and current president of the United States. A member of the Democratic Party, he served as the 47th vice president from 2009 to 2017 under Barack Obama and represented Delaware in the United States Senate from 1973 to 2009.

    He is married to Dr Jill Biden.

    Books by Joe Biden #Ad

    6 Recent Items: Joe Biden

  • UNGA 2021: Guterres gives world’s COVID-19 vaccine rollout an “F” as world leaders talk crises
  • Anti-Biden protesters swarm the UN during president’s visit
  • US is ‘opening a new era of relentless diplomacy’ says Joe Biden
  • Watch President Biden’s full remarks to the UN General Assembly
  • How Will Voters React to Scenes of Border Agents and Haitian Migrants?
  • Biden Sees Stability on the Korean Peninsula
  • Leave a Comment

    We don't require your email address now, just your name. BUT, if you do add it, you may be notified if there are replies to your comment. Please make respectful comments, which add value, and avoid personal attacks on others. Comments failing to adhere to these guidelines will not be published.