Biden admin plans to cancel $10,000 in student debt per borrower

WASHINGTON: The administration of U.S. President Joe Biden is planning to cancel $10,000 in student debt per borrower, The Washington Post reported on Friday, citing three people with knowledge of the matter.

The White House plan would apply to Americans who earned less than $150,000 in the previous year, or less than $300,000 for married couples filing jointly, two of the people told the Post. The current government pause in student interest and payments due to COVID-19 expires at the end of August. It was not clear if the administration planned to resume payment requirement then.

The sources, who were not identified, told the newspaper that details could change. Biden had hoped to make the announcement at the University of Delaware commencement this weekend, the people told the Post, but those plans changed after Tuesday's massacre of elementary school children in Texas.

According to a study by New York Federal Reserve economists, forgiving $10,000 per student would amount to $321 billion of federal student loans and eliminate the entire balance for 11.8 million borrowers, or 31 percent. Student debt cancellation has become a priority for many liberals and one that could shore up popularity with younger and more highly educated voters, who lean Democratic, before November's midterm congressional elections.

But the Biden administration has been reluctant to unilaterally make an unprecedented cancellation of college debt owned by the U.S. government, a move that would test his legal authority. Instead, Biden has asked Congress to pass a bill forgiving debt that he could sign.

The federal government has let 43 million borrowers stop paying on a total of $1.6 trillion in student loans since the onset of the COVID-19 pandemic in 2020. "I am considering dealing with some debt reduction," Biden told reporters on April 28. He said he was not considering the $50,000 debt reduction that some progressive Democrats have embraced.

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