President Biden has officially announced details on unprecedented student loan forgiveness, see what it entails.
After months, if not years of wait, President Joe Biden has officially announced his administration’s plan for student loan forgiveness. The initiative was first touted by the 47th president back on his road to the White House years ago. Hinting that some form of sweeping debt relief for student loan borrowers was soon on its way, he shared details on social media during the early hours of August 24th. Here’s what the plan entails.
As expected, federal student loan borrowers who currently owe on student loans will get $10,000 of their balances canceled. Appeasing to some that were opposed to the measure, fearing it would disproportionately benefit the wealthy, the administration also placed an income gap on the initiative. In order to qualify, borrowers must earn less than $125,000 a year.
Those who attended colleges on pell grants will be given even more in student loan forgiveness. These individuals can receive up to $20,000 in debt cancellation. More details are expected to be released later this afternoon, as the President is set to give remarks live on national television regarding the act at 2:15 EDT today.
While announcing his plan for sweeping forgiveness, Biden also declared that he will be extending the current payment pause which kept federal student loan borrowers from having to make payments on the debt. This moratorium first went into effect more than two years ago, in March of 2020 under President Donald Trump. It has been extended multiple times, with a looming deadline of August 31st. Now, Biden asserts that the freeze will extend through the end of the year, ceasing on December 31, 2022, for its final extension.
This move is part of Biden’s promise to fulfill a campaign pledge which once found the Democratic President approving of some form of student loan debt cancellation on the road to the White House. While some Democratic lawmakers like Chuck Schumer have continued to call for higher figures, Biden has always teased the $10,000 amount. In March of 2020, the 79-year-old tweeted that exact value.
Around 43 million Americans currently hold student loan debt, amounting to more than $1.6 trillion altogether. Amid a rattled economy heavily affected by the COVID pandemic, countless citizens struggled to make payments on student loans. The payment freeze helped them stay afloat, allowing many to pay for necessities like food and housing.
Not everyone is on board with the move to forgive student loan debt, however. Many opposed to this unprecedented student loan cancellation fear it will have chilling effects on the nation’s economy. It may end up costing the United States up to $980 billion over the next decade, and many worry that it’s only a quick-fix solution with decimating financial consequences.
Regardless of viewpoints, the student loan forgiveness program is set to take off. According to recent reports from Education Secretary Miguel Cardona, it looks like those who qualify need not do anything, as it will be automatically handled. Those eager to find out more details can await words from President Biden later this afternoon.