President Biden on Wednesday is set to announce his long-delayed move to forgive up to $10,000 in federal student loans for many Americans and extend a pause on payments to January, the AP reports, citing three people familiar with the plan. Biden has faced pressure from liberals to provide broader relief to hard-hit borrowers, and from moderates and Republicans questioning the fairness of any widespread forgiveness. The delay in Biden’s decision has only heightened the anticipation for what his own aides acknowledge represents a political no-win situation.
The precise details of Biden’s plan, which will include an income cap limiting the forgiveness to only those earning less than $125,000 a year, were being kept to an unusually small circle within the Biden administration and were still not finalized on the eve of the announcement. Down-to-the-wire decision-making has been a hallmark of the Biden White House, but the particular delay on student loans reflects the vexing challenge confronting him in fulfilling a key campaign promise. The plan would likely eliminate student debt entirely for millions of Americans and wipe away at least half for millions more.
The nation’s federal student debt now tops $1.6 trillion after ballooning for years. More than 43 million Americans have federal student debt, with almost a third owing less than $10,000 and more than half owing less than $20,000, according to the latest federal data. Wednesday’s announcement was set for the White House after Biden returns from vacation in Rehoboth Beach, Delaware, according to the AP's sources, who say the administration had briefly considered higher education schools in the president’s home state for a larger reveal, but scaled back their plans.
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In 2020, as he tried to shore up support among younger voters and prepare for a general election battle against then-President Donald Trump, Biden unveiled his initial proposal for debt cancellation of $10,000 per borrower, with no mention of an income cap. He narrowed his campaign promise in recent months by embracing the income limit as soaring inflation took a political toll and as he aimed to head off political attacks that the cancellation would benefit those with higher take-home pay. Democrats, from members of congressional leadership to those facing tough re-election bids this November, have pushed the administration to go as broad as possible on debt relief, and last-minute lobbying continued Tuesday even as Biden remained on his summer vacation, the AP's sources say. (More student loans stories.)
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