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Reports say that Biden plans to cancel up to $10,000 in student loan debt

Reports say that Biden plans to cancel up to $10,000 in student loan debt

A plan to forgive thousands of dollars in student loan debt for borrowers who earn less than $125,000 annually is anticipated to be unveiled by President Biden on Wednesday, according to a report. CNN originally reported late Monday that the president would make the decision when he returns to Washington from his Delaware beach residence on Wednesday, citing numerous sources involved with the conversations. 

It wasn’t immediately obvious if there will be any alterations done beforehand. 

Bloomberg and Reuters also reported that the president would make a statement Wednesday, but did not disclose any other specifics. Miguel Cardona, the secretary of education, first said on Sunday that a decision on whether to forgive student debt or continue the loan payment moratorium will be made in the next week. If Biden will speak on Wednesday, the White House did not immediately confirm to The Washington Post, but it did state that he “will have more to say on this before August 31.” 

Since March 2020, when then-President Donald Trump ordered a halt to collections due to the start of the COVID-19 pandemic, loan payments have been suspended. 

Republicans and the Committee for a Responsible Federal Budget warned Biden against repeatedly extending the moratorium, and he is now under pressure from his party to pay off the debt entirely. Progressives have asked Biden to cancel loans totaling up to $50,000 for each borrower, but the president has rejected this idea. 

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According to CNN, student loan payments will likely begin after the 2022 midterm elections even if Biden decides to prolong the moratorium once again. The Committee for a Responsible Federal Budget issued a warning in March that prolonging the repayment freeze once more would make inflation worse. 

According to an estimate released on Tuesday by the Penn Wharton Budget Model, canceling student loan debt will cost the federal government between $300 billion and $980 billion over ten years, with up to 73% of the cancellations going to households with incomes in the top 60% of the US.

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