President Joe Biden Shares Plan To Offer ‘Breathing Room’ From Student Loan Debt, Proposal Includes Forgiving Up To $20K & Pausing Repayment One Last Time
It looks like President Joe Biden is finally making good on his promise to do something about student loans.
The president announced on Wednesday, August 23, that he has a plan in place to offer some American families “breathing room” as it relates to student loan debt. In addition to forgiving up to $20,000 for some borrowers, the president said
“student loan pause extended one final time through Dec 31, 2022.”
President Joe Biden‘s plan allows borrowers who have Department of Education loans and earn less than $125,000 annually to qualify for up to $20,000 in student loan forgiveness if they received Pell Grants. Loan forgiveness of $10,000 is available to people who did not obtain Pell Grants but earn less than $125,000 annually.
In a post shared across his social media accounts, President Joe Biden said,
“In keeping with my campaign promise, my Administration is announcing a plan to give working and middle class families breathing room as they prepare to resume federal student loan payments in January 2023.”
In keeping with my campaign promise, my Administration is announcing a plan to give working and middle class families breathing room as they prepare to resume federal student loan payments in January 2023.
I'll have more details this afternoon. pic.twitter.com/kuZNqoMe4I
— President Biden (@POTUS) August 24, 2022
Biden‘s plan does not require borrowers to pay more than 10% of their discretionary income each month for undergraduate loans; instead, they will pay no more than 5% of that amount, and as long as they are making payments, the unpaid monthly interest will be paid.
As previously reported, the president said on April 28 that he was “considering” some forgiveness in an effort to lessen the burden that student loans place on millions of Americans, though he made it clear that he will not be considering a debt reduction of $50,000.
“I am considering dealing with some debt reduction. I am not considering $50,000 debt reduction. But I’m in the process of taking a hard look at whether or not there are going — there will be additional debt forgiveness, and I’ll have an answer on that in the next couple of weeks.”
Biden has been under pressure ever since taking office in January 2021 to make good on his campaign promise to reduce or eliminate student loan debt. He did not offer a firm commitment to the notion while on the campaign trail, but he did advocate providing at least $10,000 in relief for student loan debt for Americans.
The president has repeatedly extended a pause on federal student loan repayments, which initially began during Donald Trump’s administration to help borrowers struggling financially due to the pandemic.
There are said to be roughly 10 million people struggling to keep up because of the nation’s student loan debt, which is believed to be over $1.7 trillion.
Borrowers with sums of $12,000 or less will also have their loan balances forgiven after 10 years of payments, as opposed to the previous 20 years, per Biden‘s seemingly new and improved plan.
What are your thoughts on President Joe Biden’s plan? Let us know in the comments!