The road to student loan forgiveness
On Wednesday, President Biden announced that $10,000 of student loan debt per borrower will be forgiven for individuals earning less than $125,000 annually.
People who received Pell grants will be eligible for up to $20,000 in loan relief, Biden said in a tweet. The president will also extend a pause on loan repayments for all borrowers through the end of the year.
Pressure from the public — and fellow Democrats — to cancel student debt has been constant since Biden took office.
On the campaign trail in 2020, Biden made a pledge to cancel a minimum of $10,000 of student debt per person. At that point, then-President Trump had announced a pause on student loan payments due to the coronavirus pandemic — the first of many to come.
Last year, President Biden said at a CNN town hall that he questioned whether he had the legal authority to write off the level of debt some Democrats in Congress were pushing for. “I’m prepared to write off a $10,000 debt,” but not $50,000, he said. “Because I don’t think I have the authority to do it by signing the pen.”
The president will also institute an income-based repayment cap that will allow borrowers to pay no more than 5% of their monthly income toward their loans as long as they aren’t behind on payments. Some analysts see the change as more significant than the debt forgiveness.
Here’s how we got here.
The White House said Pell Grant recipients would receive twice as much loan forgiveness as other low- and moderate-income borrowers. Do you qualify? Check the Federal Student Aid website.
The Biden administration’s student loan relief plan is expected to wipe out the debt of 1 million or more Californians. Here’s who is eligible and for how much forgiveness.
-
President Biden has decided to forgive some student debt. The political fallout could be significant.
Many want at least partial loan forgiveness when the current moratorium on making repayments is set to expire at the end of August.
Federal student loan payments were paused in 2020, giving borrowers breathing room amid the pandemic. A potential plan to forgive $10,000 is met with mixed feelings.
The president said he was taking a ‘hard look’ at whether there will be more debt relief for federal student loan borrowers.
How will the Department of Education’s recalculation of student loan debts affect you? Here’s what they’re doing and how to figure it out.
Payments were set to resume May 1, but following calls from Democrats in Congress, the White House plans to give borrowers additional time.
President Biden had asked the Department of Education to study whether he can unilaterally forgive federally held student loan debt.
The White House said the president’s team is reviewing whether there are any steps he can take through executive action, and he would welcome a bill from Congress.
