Biden’s Student Loan Debt Cancellation Update
President Biden officially announced that his administration would proceed with forgiving $10,000 in federal student loan debt for borrowers who are currently making less than $125,000 per annum. They would also forgive $20,000 for Pell Grant recipients. This will be the largest forgiveness program to date.
Biden has also extended the freeze on federal student loans which was set to expire on Aug. 31. This would mean that the bill which was set to kick back right before the November midterm election has now been pushed back with another push until Dec. 31.
The White House has said though that this would be the last time that the payment would be extended. In January, people will be required to start making repayments again following a years-long pause.
The White House has also capped the underground repayment plans to 5% of the borrower’s monthly salary. Current students might also be eligible for relief depending on their parent’s income.
Biden on Wednesday took to Twitter to announce the plan. He also reiterated how this was keeping in line with his campaign policies and how he hoped this would give middle-class families some breathing room.
According to the senior administration, his plan is going to benefit over 43 million federal student loan borrowers. And 20 million borrowers will have their debts completely wiped off.
Officials have also said ha they hoped this plan would help narrow the wealth gap brought by racial discrimination.