President Joe Biden made a long-awaited announcement that his administration would cancel $10,000 in student loans for a large percentage of the 45 million Americans who are currently owed student loans. This announcement came after years of pressure by progressive activists.
The administration will cancel $10,000 of student debt for individuals earning less than $125,000 per year and couples earning less than $250,000 per year. The cancellation will be effective immediately not be countedAs taxable income likely includesGraduate schooling may result in debt.
Biden also announced that recipients of Pell Grants – funding for undergraduate students with low incomes – will be granted an additional $10,000 in debt forgiveness for a total of $20,000. Undergraduate loan holders will be able to limit their monthly income to 5 percent through the plan.
The president also said he is extending the student loan payment pause “one final time” until December 31, past the midterm elections, allowing borrowers to hold off on paying their student loans for another four months. The payment pause was scheduled to expire August 31 or in a week.
“In keeping with my campaign promise, my Administration is announcing a plan to give working and middle class families breathing room as they prepare to resume federal student loan payments in January 2023,” Biden wrote in a tweetWednesday morning
Biden’s announcement came after nearly two years of pressure from student debt activists, who have been urging himSince before he was elected, he has been able to cancel student loans.
The plan is far short of what activists have called for – debt advocates have Biden was urged toAll student loans that have no income restrictions can be cancelled or cancelled up to $50,000 As Education Department officials You have spokenA income cap makes it harder for the government administer the loan forgiveness. Advocates say that the income cap will also make the program more expensive. Unnecessary hurdles for borrowers.
The Biden administration spent monthsdeliberating about the plan. The administration was distracted by debunked issues Conservative argumentsMany people believe that student loan forgiveness will only benefit the most wealthy Americans.
Not only a self-defeating argument – wealthy people largely don’t have student debt – but it has also been disprovenResearch shows that student loan cancellation is a progressive financial strategy that will disproportionately assist people with low incomes. Indeed, the administration says90 percent of the relief is for households with incomes below $75,000 per year.
Conservatives also claim that the plan will be expensive, but advocates argue that it is worth the cost. A large portion of the debtFor borrowers with larger debt loads, this would have prevented them from ever being paid off.
Progressive lawmakersDebt activists celebratedThe announcement. “Today is a day of joy and relief,” wrote Sen. Elizabeth Warren (D-Massachusetts). “President Biden is canceling up to $20,000 of federal student debt for as many as 43 million Americans – a powerful step to help rebuild the middle class. This will be transformative for the lives of working people all across this country.”
Activists promised to continue fighting for more relief for the millionsThere are more than 10,000 or $20,000 in student debt in the United States.
“This didn’t just happen folks. We organized. Now some 20M Americans should be getting student debt relief,” wrote Braxton BrewingtonPress secretary for the Debt Collective. “This is truly just the beginning – I promise you.”
“If we can cancel $10k we can cancel it all,” the Debt Collective added.