United States President Joe Biden's administration reportedly plans to forgive $10,000 in student debt per borrower, a decision that comes after several months of internal negotiations on how to structure loan forgiveness for the tens of millions of American borrowers.
The Democratic president had hoped to make the announcement as soon as this weekend at the University of Delaware commencement, three people with knowledge of the matter said. However, they noted that the timing has changed after the horrifying massacre in Texas on Tuesday.
Biden's Plan To Forgive Student Debt
The sources said that the White House's latest plans called for limiting debt forgiveness to Americans who earned less than $150,000 in the previous year, or less than $300,000 for married couples filing jointly. However, it was unclear whether or not the Biden administration will simultaneously require interest and payments to resume at the end of August when the current pause is scheduled to end.
The people, who spoke under the condition of anonymity, warned that some details of the plans could change before the White House makes the decision official. The likely decision follows several months of uncertainty over the fate of student debt for tens of millions of American borrowers, as per the Washington Post.
Amid the uncertainties, Biden has been, at times, sounding skeptical of canceling loans but is under pressure from his falling approval ratings among young voters ahead of the November midterm elections. The White House's decision is also expected to result in new arguments between Democrats and Republicans over federal spending.
Read Also : President Joe Biden Calls for Gun Laws That Would Not Negatively Impact the Second Amendment
The issue could prove to be a defining point on the campaign trail of either party as GOP lawmakers have already said that the idea amounts to wasteful spending that primarily benefits affluent college-educated professionals.
According to CNN, the previous situation has led Biden and his aides to look at a $125,000annual income limit for forgiveness, believing that limit is both in line with the progressive income tax model and good politics
Millions of American Borrowers
But in recent weeks, people involved in the discussions said that nearly every internal conversation regarding what to do has turned into asking if canceling the debt will feed inflation just at the moment when Democrats are hoping the rates will start to go back down ahead of the November midterm elections.
Sources said they urged the Democratic president to announce his cancellation decision jointly with what was expected to be an end to the moratorium on student loan payments. The process was started during the coronavirus pandemic under former President Donald Trump's administration.
The situation also comes after April when the Biden administration made big changes to key student loan forgiveness and repayment programs. The Democrat and his colleagues announced historic reforms to federal student loan-income-driven repayment (IDR) programs.
This includes Income-Based Repayment (IBR), Revised Pay As You Earn (REPAYE), and other plans. IDR plans allow federal student loan borrowers to make payments based on their income and family size. After about two decades within the program (depending on the specific plan), any remaining balance can be forgiven, Forbes reported.
Related Article:
