President Joe Biden will speak on his student loan forgiveness plan Wednesday afternoon and in part announce the cancellation of up to $20,000 in student debt for Pell Grant recipients.
Biden’s announcement follows months of debate within the administration regarding the subject of student loan cancellation. Biden, in addition to forgiving up to $20,000 in student debt for Pell recipients, will also cancel up to $10,000 in student loans for individuals making less than $125,000 a year, senior administration officials told reporters on a background call.
“This announcement has three major parts, and it offers targeted debt relief to lower and middle income families as part of a comprehensive effort to address growing college costs,” a senior administration official said.
To qualify for $20,000 in student loan relief as a Pell Grant recipient, an individual must also make less than $125,000 a year or $250,000 as part of a household.
“It is really hard to overstate how significant this is for America’s middle class and for our economy. This announcement will help people who by and large came from working families and are working class now,” a senior administration official added. “If all borrowers claim the relief that they are entitled to, 43 million federal student loan borrowers could benefit, and of those, 20 million will have their debt completely cancelled.”
Biden is also extending the current pause on student loan debt payments through Dec. 31, 2022. This will be the “final” extension, Biden wrote in a tweet breaking down his plan.
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
The administration is proposing a number of initiatives aimed at making “the student loan system more manageable for current and future borrowers,” the White House also noted in a fact sheet. This includes a proposal from the Department of Education to slash monthly payments in half for undergraduate loans and “new efforts” designed to ensure colleges don’t increase costs.
The Biden Administration vowed that a decision on student loans would come before the end of August. While the plan is being announced within the proposed timeline, some members of the Democratic Party are likely to be disappointed with Biden’s decision.
Senate Majority Leader Chuck Schumer and Democratic Massachusetts Sen. Elizabeth Warren, for example, have pushed Biden to cancel upwards of $50,000 in student loan debt. Other lawmakers, like Independent Vermont Sen. Bernie Sanders, have called for a full cancellation of student debt, Forbes previously reported. (RELATED: ‘A Milestone’: Biden Administration Wipes Out $5.8 Billion Of Student Loan Debt From Corinthian Colleges)
Biden is slated to deliver remarks on his student loan forgiveness plan at the White House later Wednesday.