Students wait on Biden to announce student loan relief on Wednesday, unclear exactly what the president will ultimately announce
President Biden is poised to announce student loan relief on Wednesday, according to two sources with knowledge of the situation.
However, it remains unclear what the president will finally reveal. One possibility is to forgive $10,000 in student loan debt for borrowers earning up to $125,000, according to a source involved with the discussions. NBC News was the first to report Mr. Biden’s announcement time.
It is also feasible that the administration would simply extend the hold on student loan payments for the time being and wait to make an announcement regarding the cancellation of student loan debt.
According to sources, the president said he would make a decision by August 31, and he remains on schedule to do so.
According to an analysis by the Penn Wharton Budget Model, erasing $10,000 in student loan debt for persons earning up to $125,000 per year would cost roughly $300 billion in the first year. It was also determined that more than two-thirds of the debt forgiveness will benefit the top 60% of earnings in the United States.
Low-income Critics of student debt cancellation point out that Americans who never attended college and are struggling financially due to record-high inflation would not benefit from any loan cancellation. In addition, erasing a portion of student loan debt would not solve the significantly outpacing inflation in recent years, which has led to a rise in education expenses.
The halt in student loan repayment began under the Trump administration at the beginning of the pandemic, and Mr. Biden has paused student loan repayments a total of four times since he became president. The present moratorium expires on August 31, after which borrowers must resume debt repayment if no further extension is granted.