Photo by Larry French/Getty Images for We, The 45 Million
- The Supreme Court is meeting to weigh Joe Biden's student-debt cancellation plans.
- Biden wants to cancel up to $10,000 in student loans for those who earn less than $125,000 per year.
- In most other rich countries, student debt is easier to get written off than in the US.
The US Supreme Court will meet Thursday in another crucial test of President Joe Biden's plans to cancel billions in student debt.
Biden announced plans last year to cancel up to $10,000 in debt for those who earn less than $125,000 per year, and in some cases up to $20,000, but lower courts blocked it.
The plans could effect up to 40 million Americans, and the conservative-majority Supreme Court is expected to announce a ruling on the constitutionality of the move in June. Some justices have already signalled skepticism about the scheme.
US students graduate with some of the highest debts in the world, and Biden's plans could wipe out around $400 billion in debt.
Under current policies, students can have loans forgiven in some limited circumstances, such as if they work in the public sector for 10 years, have a disability or have declared bankruptcy.
Here's a look at how other rich countries handle student debt, according to data from Lendingtree and the New York Times.
Germany and Sweden
In Germany and Sweden, university education is entirely state-funded. In these countries, students take out loans or work part-time to cover living expenses.
In Sweden, living expense borrowing costs average at around $20,00 per student, but students can repay them over a longer period of time than is typical in the US.
France
Higher education is largely state funded in France, and students pay tuition fees of up to $600, a fraction of their cost in the US. Many students receive non-repayable grants to help with the costs of their education and living costs.
Japan and South Korea
In both Japan and South Korea, tuition fees at private colleges cost up to $8,000, and around $5,000 at public institutions.
In South Korea, studying is funded through low interest loans which like in the US are repayable over a 10 year period, though in some cases an income threshold kicks in.
Japan operates a similar system, in which government backed loans are repaid over a longer period (up to 20 years,) but climbing fees and stagnating incomes are making repayments difficult for many graduates, the Japan Times reported.
Australia and the UK
Students in these countries graduate with more debt than in European countries — but the amount they repay is linked to earnings after they graduate, so default and major hardship is much less frequent than in the US.
In Australia average annual fees are around $4,000 in a public college, and around twice that at a private institution. The UK has some of the highest public university fees outside the US, mostly at $12,000.
In England, students typically graduate with around $40,000 owed per student, compared to $30,000 in the US. Unlike in Australia, they can also borrow to cover living expenses.
The earnings-linked repayment system means debt is manageable, but often is paid back over decades.
In the UK, debt is forgiven after 30 years. In Australia there is no equivalent limit, but debts are often lower.
In the US, earnings linked repayment must be requested though a difficult-to-negotiate system.
Canada
The Canadian system resembles the UK's and Australia's, in that debt repayment is linked to earnings. College fees are generally lower than the US, at around $4,000 a year.
Average college tuition fees in the US are around $10,000 a year and much higher in a private institution.
If you qualify for government-loan-repayment assistance, the debt gets wiped after 15 years.
While students in the US have access to some of the best universities in the world, they also face some of the highest levels of debt, steepiest levels of interest, and a demanding repayment system that results in increasing levels of loan repayment defaults.
Even if Biden's loan repayment cancellations are blocked by the Supreme Court, there may be plenty to learn from other countries in reforming the US student loans system.