Individuals and families with incomes of up to $125,000 in 2020 and $250,000 in 2021 are qualified for at least $10,000 in federal student loan debt forgiveness. Pell Grant recipients, who are mostly low-income undergrads, are eligible to receive up to $20,000 in assistance.
According to the White House, about 20 million borrowers are anticipated to have their whole total forgiven and over 40 million borrowers are eligible for some form of student debt relief, as per USA Today.
Biden's Student Loan Forgiveness Plan
The Education Department has announced that as of Thursday, borrowers who have student loans through the Federal Family Education Loan (FFEL) program and Perkins Loans and have not yet consolidated their debt into direct loans will no longer be able to do so and will no longer be qualified for federal debt relief. These programs are offered by private institutions even though they are federally guaranteed.
Borrowers with FFEL and Perkins Loans who sought to consolidate in the direct loan program before Thursday are still eligible for debt reduction. The Education Department is now assessing if there are alternative routes to assist borrowers with federal student loans that are not held by ED, including FFEL Program loans and Perkins Loans.
On the same day, the agency made a change without explaining, six Republican-led states sued the Biden administration for student loan relief. The Biden administration is waiving $10,000 in student loan debt for families making under $250,000 and for individuals making under $125,000.
Those who get Pell Grants and are from less affluent backgrounds may additionally qualify for an additional $10,000 in debt forgiveness. President Joe Biden stated that the COVID-19 pandemic is over in an interview with CBS News 60 Minutes, which is cited by the plaintiffs in the GOP lawsuit, CBS News reported.
The Education Department recently acknowledged that it lacked the statutory authority to erase student loans in bulk. However, the Biden administration abruptly launched a significant forgiveness program, saying it had the authority under the post 9/11 HEROES Act, under pressure from progressives and to boost Democratic chances in the midterm elections.
Biden Compares Student Loan Debt to PPP Loan
In truth, Biden's launch of his forgiveness program and his subsequent promotion of it is both elaborate ruses. The program, which is still merely a proposal, only exists essentially as a series of press releases, data sheets, and FAQs put out by the White House As Mark Joseph Stern noted at Slate in a piece in support of the giveaway, the Department of Education.
With a price tag north of $400 billion, it'll fuel inflation even further, especially after the Democrats' $250 billion CHIPS and Science Act, $485 billion Inflation Reduction Act, $1.2 trillion infrastructure bill, and $1.9 trillion American Rescue Plan. Of course, if the White House does pull it off, it would be unfair to those who don't have outstanding loans, not to mention poorly timed, as per New York Post.
On the other hand, President Biden criticized Republicans on Saturday once more who had benefited from COVID-19 small business relief loans but now oppose his decision to cancel hundreds of billions in student loan debt.
Biden compared the Paycheck Protection Program (PPP), which was established by the CARES Act, which was passed by Congress with bipartisan support during the Trump administration, to his executive action to cancel $10,000 of federal student loan debt for certain borrowers making less than $125,000 annually and up to $20,000 for Pell Grant recipients.
In 2020 and 2021, several Republicans who are now against Biden's student loan giveaway owned small businesses or had connections to organizations that asked for and were granted PPP loans, which have now been forgiven, according to Fox News.
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