According to the White House statement on Monday, President Biden is considering whether income should be used to determine eligibility for any student loan forgiveness program.
Last week, the president said that, by executive action, he might be able to wipe out $10,000 in student debt per borrower.
Jen Psaki, the White House press secretary, was asked if an income cap for any potential student aid program was being considered during Monday’s press briefing.
Psaki answered, “There is.”
At this time, it is unknown what the maximum income for student loan forgiveness would be if an income cap were included in any potential plans. Officials are said to be considering limiting the relief to anyone who made less than $125,000 or $150,000 as individual filers the previous year. For married couples filing jointly, this would translate to a $250,000 to $300,000 threshold.
Income limitations, according to Psaki, will guarantee that student loan relief is “targeted at people who need help the most.”
Psaki was also asked if the White House has considered the implications of prospective student loan forgiveness on inflation. “I know there’s been outside analysis of that, but I don’t have any internal analysis at this point to preview for you,” she said.
The president stated last week that he is “considering dealing with some debt reduction.” “I’m not considering a $50,000 debt reduction,” Biden added, “but I’m looking into whether or not there will be additional debt forgiveness.”
During his presidential campaign, Biden advocated for eliminating $10,000 in student debt for most borrowers, but his legal authority to do so via executive order has been questioned. Last year, the president asked the Education Department for a document to see if he had the authority to cancel student loan debt unilaterally.
Meanwhile, noting the ongoing economic challenges caused by the COVID-19 outbreak, the president extended the moratorium on student loan payments until August 31. In 2020, former President Donald Trump imposed a repayment moratorium for the first time.