Following months of consideration and as a two-year moratorium on student loan payments is about to expire, CNN reported Monday that the Biden Administration may erase $10,000 in student loan debt for Americans who make less than $125,000 per year.
According to CNN, which cited a number of anonymous sources, the White House might announce its comprehensive student debt forgiveness scheme as early as Wednesday.
Although the program’s specifics are still being worked out, the source warned that the Biden Administration is “trending toward” forgiving $10,000 per borrower with an income cap.
The concept is comparable to, but not the same as, prior ideas that the White House considered: The Biden Administration reportedly considered waiving $10,000 in debt for borrowers making less than $150,000 in May, while in May, then-White House Press Secretary Jen Psaki informed reporters that $125,000 was probably the upper income limit.
WHAT TO LOOK OUT FOR
Officials will decide on student loans “within the next week or two,” Secretary of Education Miguel Cardona said on Sunday’s episode of NBC’s Meet the Press. A deadline for the Biden Administration is approaching: If not renewed, a moratorium on federal student loan interest and payments enacted during the epidemic is set to expire on August 31 and force borrowers to resume paying monthly payments for the first time since early 2020.
President Joe Biden has repeatedly extended the moratorium on student loan payments and provided targeted loan forgiveness for students at particular schools and other borrowers, but some Democrats have put pressure on Biden to cancel a sizable portion of the majority—if not all—of Americans’ student loans. On the campaign trail, Biden stated that he wanted to forgive $10,000 of student loan debt per person. However, he has publicly questioned whether he has the legal authority to do more without congressional approval, and he is reportedly considering whether a large-scale forgiveness programme would worsen the nation’s spiralling inflation rates and primarily help wealthy college graduates. Biden has been urged to erase $50,000 per borrower by Senate Majority Leader Chuck Schumer (D), and other progressives have argued against setting an income ceiling. Polling on student debt cancellation shows that opinions are split along partisan lines, with Democrats heavily in favour and Republicans mainly against.
59%. According to a CNBC-sponsored survey, that is the proportion of Americans who are concerned that the cancellation of student loans could aggravate inflation, which reached a 40-year high in June. All Americans should have their student debts forgiven, according to 32% of respondents. However, 34% of respondents said only those who are “in need” should have their loans forgiven, and 30% said no one should have their loans forgiven.
In a series of tweets on Monday, economist Larry Summers rebuffed proposals for “unreasonably generous student loan relief,” noting that such a scheme may increase inflation and provide little assistance to future students who cannot afford to attend college. The government shouldn’t prolong the payment moratorium, according to the Treasury Secretary from the Clinton administration, and if it chooses to permanently cancel debt, it should only provide a few thousand dollars in assistance to “those with legitimately middle class salaries.”