Student loan forgiveness could be on the horizon

Student loan relief may be on tap after the Federal Reserve announced a $85bn stimulus package on Tuesday. 

The Fed is also expected to announce further measures to support the economy as it considers how to boost inflation. 

As well as boosting consumer spending, the stimulus package will also help stimulate the economy through the banking system and reduce the risks of default.

“Student loan debt may soon be forgiven or forgiven in a way that will be beneficial to all borrowers,” Federal Reserve President Janet Yellen said.

“The Federal Reserve Board will be reviewing its portfolio of measures for student loan forgiveness and other assistance measures in the coming months.”

The US government plans to spend $5.6tn on student loans by 2020.

 The US Government Accountability Office estimates the cost of servicing these debts at $2tn.

Student loan forgiveness has long been a popular idea for the US, but the Federal government has not offered any specific details about the extent to which it will offer the option.

It will be up to Congress to decide whether to provide such relief to the US population.

Last week, Congress voted to lift a ban on the private sale of student loan debt.

The Senate passed a bill to lift the ban in June.