President Joe Biden announced his plan to forgive up to $20,000 worth of student debt for Americans earning less than $125,000 annually.
Biden announced his decision and its details on social media. In his post, he cited his “campaign promise” to provide “breathing room” on student loans for “working and middle-class families.”
The president said he would forgive student debt of up to $20,000 for those who went to college on Pell grants. Meanwhile, he would forgive $10,000 for those who didn’t.
The president’s plan will only apply to people making under $125,000 yearly or couples filing $250,000 in joint earnings.
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 made this decision following months of mulling over the issue and facing pressure from leftist members of the Democratic party, including Sens. Chuck Schumer (D-NY) and Elizabeth Warren (D-MA).
According to the Penn Wharton Budget Model, the president’s plan is projected to cost at least $300 billion.
However, this decision disappointed leftists looking for a more aggressive plan regarding student debt forgiveness.
Some senators, including Warren, tried to get Biden to forgive up to $50,000 per person. If this had gone through, it would cost up to $933 billion, as per the Wharton estimate.
Besides college loan forgiveness, Biden also announced that he plans to extend the 2020 pause on repayments of student loans during the pandemic. The pause will remain up until Dec. 31, 2022.