According to a White House spokesperson, President Joe Biden’s administration has not made a final decision on student loan cancellation, despite reports that it was preparing to eliminate $10,000 in student debt per borrower.
Three people acquainted with the idea were quoted in the Washington Post piece. According to two of them, the $10,000 debt forgiveness would be available to Americans who earned less than $150,000 in the previous year, or less than $300,000 for married couples filing jointly.
The report, according to White House spokesman Vedant Patel, was false. “No decisions have been made yet. But as a reminder, no one has been required to pay a single dime of student loans since the president took office,” Vedant told Reuters.
The current government interest and payment halt for COVID-19 students end at the end of August. Details could alter, according to the anonymous sources who spoke to the newspaper.
According to research by economists at the New York Federal Reserve, forgiving $10,000 per student would result in the forgiveness of $321 billion in federal student loans, wiping out the entire total for 11.8 million borrowers, or 31%.
“Administration actions have already provided more than $18.5 billion in targeted debt relief to more than 750,000 borrowers. Not to mention tens of billions more saved by the 41 million borrowers who have benefited from the extended student loan payment pause,” Patel added.
Student debt forgiveness has become a top concern for many liberals, and it’s a move that might boost Democratic support among younger and better-educated voters ahead of November’s midterm legislative elections.
However, the Biden administration has been hesitant to make an unprecedented unilateral cancellation of government-owned college debt, a move that would put his legal powers to the test.
Biden has instead asked Congress to pass a debt-forgiveness bill that he can sign.
Since the outbreak of the COVID-19 pandemic in 2020, the federal government has allowed 43 million borrowers to default on $1.6 trillion in student loans.
On April 28, Biden told reporters, “I am considering dealing with some debt reduction.” He stated that he was not considering the $50,000 debt reduction advocated by certain radical Democrats.