Biden administration to cancel at least $10K in student loan debt | Education News

US President Joe Biden has announced his government will forgive at least $10,000 in student loans for many debt-laden university graduates in the United States, in a move that progressive activists and lawmakers welcomed but said does not go far enough.

In a tweet on Wednesday morning, Biden said students who received federal Pell Grants for lower-income families would get $20,000 in debt forgiveness, while those who did not would get $10,000. The relief only applies to those earning less than $125,000 annually, he 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,” said Biden, who is expected to speak to reporters later in the day.

The forgiveness could impact 8 million borrowers automatically, the Department of Education said, while others would need to apply.

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

Members of Biden’s own Democratic Party have pushed him to forgive as much as $50,000 per borrower, arguing that the debt makes it impossible for younger Americans to save for down payments on a home or other big consumer purchases.

Republicans have argued the move will disproportionately help people earning higher incomes.

“Forcing taxpayers to foot a $300 BILLION bill so borrowers can dine and dash is unfair and reckless,” the Republican Committee on Education & Labor wrote on Twitter ahead of the announcement, panning the president’s expected debt relief plan.

But the White House said in a statement on Wednesday that “skyrocketing cumulative federal student loan debt—$1.6 trillion and rising for more than 45 million borrowers—is a significant burden on America’s middle class”.

US consumers carry a massive $1.75 trillion in student loan debt, most of it held by the federal government, the result of private and state-backed university tuition fees that are substantially higher than in most other countries.

Tuition fees to attend US universities have also surged over the past decades, with the average annual cost at a public 4-year college now 37 times higher than it was in 1963, according to the Education Data Initiative research group.

Amid a nationwide campaign to forgive student debt, Biden campaigned on a promise to immediately cancel “a minimum of $10,000 of student debt per person”. But his administration had so far only extended a pause on student loan repayments put in place during the COVID-19 pandemic.

On Wednesday, Biden said federal loan repayments would start up again in January of next year.

“Today’s announcement marks a historic moment and critical first step in the long fight to end the student debt crisis. Broad-based student debt cancellation will free millions of Americans to invest in their futures, support their families, and contribute to their communities and the economy,” Natalia Abrams, president and founder of the Student Debt Crisis Center, said in a statement.

“While this announcement is a major win for many, it is important to stress that $10,000 will leave many others still crushed by debt and important details will determine who has access to much-needed relief,” Abrams said.

That was echoed by other progressive groups in the US, who pointed out that Black students, in particular, hold disproportionately more debt than others.

Canceling $10,000 in student debt when the average white borrower is $12,000 in debt, while Black women hold on average over $52,000 isn’t just unacceptable, it’s structural racism.

— Nina Turner (@ninaturner) August 23, 2022

“Canceling $10,000 of student debt after ‘considering’ it for more than a year and a half is like waiting on hold for 6 hours only to get a 5% refund,” the National Association for the Advancement of Colored People (NAACP) advocacy group said on Twitter.

“Canceling $10,000 in student debt when the average white borrower is $12,000 in debt, while Black women hold on average over $52,000 isn’t just unacceptable, it’s structural racism,” said progressive activist and former Ohio state senator Nina Turner.

Others questioned why businesses received much more debt forgiveness than students.

“If we could afford to cancel hundreds of billions in [Paycheck Protection Program] loans to business owners in their time of need, please do not tell me we can’t afford to cancel all student debt for 45 million Americans,” Senator Bernie Sanders tweeted.