President Joe Biden has said the US Government will forgive $10,000 (£8,475) in student loans for college graduates.

The White House said the country’s “skyrocketing cumulative federal student loan debt – $1.6 trillion and rising for more than 45 million borrowers – is a significant burden on America’s middle class.”

Many Democrats had pushed for as much as $50,000 (£42,309) per borrower but cheered the move nonetheless as the party turns its gaze to November’s midterm elections.

“Earning a college degree or certificate should give every person in America a leg up in securing a bright future,” education secretary Miguel Cardona said.

“But for too many people, student loan debt has hindered their ability to achieve their dreams – including buying a home, starting a business or providing for their family.”

Cancelling the debt will free up hundreds of billions of dollars for new consumer spending that could be aimed at homebuying, according to economists who said this would add a new wrinkle to the country’s inflation fight.

Republicans, seeking to regain control of Congress in November, oppose the move, arguing it is unfair because it will disproportionately help people earning higher incomes.

“President Biden’s student loan socialism is a slap in the face to every family who sacrificed to save for college, every
graduate who paid their debt, and every American who chose a certain career path or volunteered to serve in our Armed Forces in order to avoid taking on debt,” Senate Minority Leader Mitch McConnell said.