The 46th President of the United States Joe Biden announced Wednesday that his administration will forgive $10,000 in federal student loan debt for most borrowers.
The announcement made from the White House Wednesday afternoon comes after months of pressure members of the Democrat Party within congress such as Senate Majority Leader Chuck Schumer, D-NY, that have pushed the President to cancel as much as $50,000 of debt per person. President Biden has expressed repeatedly over the past several months his reluctance to forgive that amount of student loan debt for all borrowers.
Instead, the President laid out the terms of the loan relief, which will be limited to Americans who earn under $125,000 per year or $250,000 for married couples or heads of households.
President Biden also said under this plan that he will cancel up to $20,000 for recipients of Pell Grants.
There will also be one final extension of the payment pause for most federal student loans that will last through Dec. 31 of this year.
Biden said with this action taken 45% of all borrowers which is about 20 million people with have their student loans fully canceled.
“That’s 20 million people who can start getting on with their lives,” Biden said. “All of this means people can start finally to crawl out from under that mountain of debt. To get on top of their rent and their utilities. To finally think about buying a home or starting a family or starting a business.”
With the move to cancel the $10,000 in debt for borrowers who make under $125,000, it will cost the federal government $244 billion according to education analyst Mark Kantrowitz and $120 billion for the relief given to Pell Grant recipients.
According to the U.S. Department of Education, more than $40 million Americans have student loan debut which accounts to nearly $1.75 trillion dollars that is owed.
