(NEXSTAR) – President Biden has been considering some sort of federal student loan relief for weeks, and it looks like it will be a few more weeks before he announces his decision.
Biden will likely announce his student debt plans in July or August, The Wall Street Journal reported Monday. This means the potential ruling will come near the end of the student loan payment moratorium, which is currently due to expire on August 31.
The White House has repeatedly said that the Biden administration continues to weigh options regarding student loan forgiveness and that no decision has yet been made.
In April, multiple sources confirmed to The Hill that Biden was considering cutting at least $10,000 per borrower. Biden has previously said he does not plan to forgive $50,000 per borrower. That’s no big surprise — on the campaign trail, Biden backed a much smaller plan of up to $10,000 in forgiveness per borrower.
A Federal Reserve analysis found that forgiving $10,000 per borrower would eliminate their entire balance for about 11.8 million borrowers, or just over 31%. If the Biden administration were to go ahead with this plan, about $321 billion in federal student loans would be forgiven.
The amount of debt forgiveness each borrower receives may depend on their income. Sources told The Washington Post that the relief could be limited to those earning less than $125,000 or $150,000 per individual filer or $250,000 or $300,000 for couples filing together.
The rebate could also be limited to loans used for undergraduate education, excluding programs that require additional schooling. Asked about Biden’s concerns about helping borrowers who attended schools like Harvard and Yale, former White House press secretary Jen Psaki said the president wants to make sure the help is “targeted to graduates with the greatest needs”.
Opponents of student loan forgiveness have argued that any relief would benefit higher-income Americans who are more able to repay the loans.
There has also been confusion over Biden’s power to cancel student loans. House Speaker Nancy Pelosi said he had no legal authority, remarking instead that it “would be an act of Congress.” Senate Majority Leader Chuck Schumer, meanwhile, argued that Biden could do so under the same legal provision Trump used to delay payments and interest accrual early in the pandemic.
Republicans introduced legislation to not only limit Biden’s power to extend a payment moratorium, but “prohibit the president from canceling outstanding federal student loan obligations due to a national emergency.”
“The majority of Americans don’t have a college degree,” Sen. Mike Braun (R-IN) said in April of his bill, called the Stop Reckless Student Loan Actions Act. “Why should they be forced to foot the bill for college degrees in the name of pandemic relief? This wealth transfer is not a move to “advance fairness”, but rather a taxpayer handout to appease far-left activists.
Under the Biden administration, about $25 billion in federal student loan debt was forgiven for some 1.3 million borrowers. Last week, the Department of Education announced it would cancel outstanding federal student loans for former Corinthian Colleges students after the school was accused of defrauding millions of students into government-backed loans. federal government. A total of $5.8 billion in loans will be canceled for 560,000 borrowers, making it the largest loan issued by the Department of Education.
While $25 billion in total relief might seem like a lot, it equates to about 1.5% of the $1.6 trillion in federal student debt Americans have. Pressure continues to grow for more debt cancellation as the end of the moratorium on payments and the midterm elections approach.
The Department of Education also confirmed that it is “working on new regulations that will permanently improve a variety of existing student loan relief programs, significantly reduce monthly payments, and provide better protection for students and taxpayers.” against unaffordable debts”. Details of these regulations have not yet been released.