WASHINGTON (AP) — President Joe Biden on Wednesday announced detailed plans to deliver on a campaign promise to provide $10,000 in student debt cancellation for millions of Americans — and up to $10,000 more for those with the greatest financial need — along with measures to lower the burden of repayment for their remaining federal student debt.
Borrowers who earn less than $125,000 a year, or families earning less than $250,000, would be eligible for the $10,000 loan forgiveness, Biden announced. For those who also receive Pell Grants, which are reserved for undergraduates with the most significant financial need, the federal government would cancel up to an additional $10,000 in federal loan debt.
“Both of these targeted actions are for families who need it the most: working and middle class people hit especially hard during the pandemic,” Biden said in remarks at the White House Wednesday afternoon.
Biden is also extending a pause on all federal student loan payments for what he called the “final time” through the end of 2022.
If his plan survives legal challenges that are almost certain to come, it could offer a windfall to many in the run-up to this fall’s midterm elections. More than 43 million people have federal student debt, with an average balance of $37,667, according to federal data. Nearly a third of borrowers owe less than $10,000, and about half owe less than $20,000. The White House estimates that Biden’s announcement would erase the federal student debt of about 20 million people.