Biden is also proposing capping the amount that borrowers must pay monthly on undergraduate loans at 5 percent of their earnings, down from 10 percent previously. Cancellation for some will be automatic, if the department has access to to their income information, but others will need to fill out a form.Ĭurrent students would be eligible for relief only if their loans were originated before July 1, 2022. The administration said the Education Department would release information in coming weeks for eligible borrowers to sign up for debt relief. The extension of the pandemic-era payment freeze comes just days before millions of Americans are to find out when their next student loan bills will be due. In fact many Democrats, from congressional leaders to others facing tough reelection bids this November, have pushed the administration to go as broadly as possible on debt relief, seeing it in part as a galvanizing issue, particularly for Black and young voters. Democrats are literally using working Americans’ money to try to buy themselves some enthusiasm from their political base.” Senate GOP leader Mitch McConnell said, “President Biden’s inflation is crushing working families, and his answer is to give away even more government money to elites with higher salaries. The White House emphasized that no one in the top 5 percent of incomes would see any loan relief. Four years after earning bachelor’s degrees, Black borrowers owe an average of nearly $25,000 more than their white peers, according to a Brookings Institution study.īiden has faced pressure from liberals to provide broader relief to hard-hit borrowers, but also from Republicans questioning the fairness of any widespread forgiveness. Proponents say cancellation will narrow the racial wealth gap - Black students are more likely to borrow federal student loans and at higher amounts than others. READ MORE: What we know about Biden’s student loan debt forgiveness plan To finally think about buying a home or starting a family or starting a business.” To get on top of their rent and utilities. “All this means, people can start to finally crawl out from under that mountain of debt. “That’s 20 million people who can start getting on with their lives,” Biden said. The White House estimates that Biden’s announcement would erase the federal student debt of about 20 million people. Nearly a third of borrowers owe less than $10,000, and about half owe less than $20,000. More than 43 million people have federal student debt, with an average balance of $37,667, according to federal data. If his plan survives legal challenges that are almost certain to come, it could offer a windfall to many in the run-up to this fall’s midterm elections. “Both of these targeted actions are for families who need it the most: working and middle class people hit especially hard during the pandemic,” Biden said in remarks at the White House Wednesday afternoon.īiden is also extending a pause on all federal student loan payments for what he called the “final time” through the end of 2022. For those who also receive Pell Grants, which are reserved for undergraduates with the most significant financial need, the federal government would cancel up to an additional $10,000 in federal loan debt. Watch Biden’s remarks in the player above.īorrowers who earn less than $125,000 a year, or families earning less than $250,000, would be eligible for the $10,000 loan forgiveness, Biden announced. WASHINGTON (AP) - President Joe Biden on Wednesday announced detailed plans to deliver on a campaign promise to provide $10,000 in student debt cancellation for millions of Americans - and up to $10,000 more for those with the greatest financial need - along with measures to lower the burden of repayment for their remaining federal student debt.
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