The forgiveness plan, expected to be announced on Wednesday, will benefit most student loan borrowers making less than $125,000 a year.
President Biden is expected to announce on Wednesday, long-anticipated plans to forgive up to $10,000 in student loans and extend the COVID pause in repayments until the end of the year.
Biden has faced pressure from liberals to provide broader relief to hard-hit borrowers, and from moderates and Republicans questioning the fairness of any widespread forgiveness. The delay in Biden’s decision has only heightened the anticipation for what his own aides acknowledge represents a political no-win situation.
The forgiveness plan is expected to benefit most borrowers making less than $125,000 a year. It is designed to help young borrowers and give Biden’s Democratic allies a crucial boost ahead of the November midterm elections.
The nation’s federal student debt now tops $1.6 trillion after ballooning for years. More than 43 million Americans have federal student debt, with almost a third owing less than $10,000 and more than half owing less than $20,000, according to the latest federal data.
The continuation of the pandemic-era payment freeze comes just days before millions of Americans were set to find out when their next student loan bills will be due. This is the closest the administration has come to hitting the end of the payment freeze extension, with the current pause set to end Aug. 31.
Down-to-the-wire decision-making has been a hallmark of the Biden White House, but the particular delay on student loans reflects the vexing challenge confronting him in fulfilling a key campaign promise.
The plan would likely eliminate student debt entirely for millions of Americans and wipe away at least half for millions more.
Biden hopes to balance the demands of progressives and racial justice advocates for total or much more extensive student loan forgiveness against the concerns of moderates about the economic implications.
