Biden to Cancel $10,000 in Student Loan Debt for Borrowers Earning Less Than $125,000

 

The Biden administration is expected to announce today the cancellation of up to $10,000 in student loan debt per borrower under a certain income, following immense pressure from liberals and a years-long pause on loan payments during the pandemic.

“With the flick of a pen, President Biden has taken a giant step forward in addressing the student debt crisis by canceling significant amounts of student debt for millions of borrowers,” Senate Majority Leader Charles E. Schumer (D-N.Y.) and Sen. Elizabeth Warren (D-Mass.) said in a joint statement. “No president or Congress has done more to relieve the burden of student debt and help millions of Americans make ends meet.”

Additionally, the department is proposing a federal rule aimed at making the student loan system more manageable for current and future borrowers.

The proposed rule would change income-based repayment for student loans, cutting in half the amount borrowers would have to pay each month on their undergraduate loans, "while borrowers with both undergraduate and graduate loans will pay a weighted average rate."

The proposal would also "raise the amount of income that is considered non-discretionary income and therefore protected from repayment." And it would forgive loan balances after 10 years of payments rather than 20 years under many income-driven repayment plans for borrowers with original loan balances of $12,000 or less, the department said.