Biden pays off $10,000 to $20,000 of student loan debt

President Joe Biden on Wednesday announced a long-awaited plan for millions of Americans to pay off $10,000 in student loan debt and up to $10,000 more for those most in need. He also unveiled new measures to reduce the financial burden of repaying his remaining federal student debt.

Individuals earning less than $125,000 a year and families earning less than $250,000 will be eligible for $10,000 in debt forgiveness, Biden tweeted.

For recipients of Pell Grants, reserved for the neediest college graduates, the federal government will forgive up to an additional $10,000 in federal student debt.

In addition, Biden extended again, until the end of 2022, the suspension of student debt payments, although he clarified that this would be “the last time” that he does so.

If the plan survives the lawsuits that it will surely attract, it will provide long-awaited economic relief to a large part of the population just before the presidential mid-term elections, which will be in November. More than 43 million people are saddled with student debt, which averages $37,667, according to federal data.

Nearly a third of those in debt owe less than $10,000 and about half have debts of less than $20,000. The White House estimates that its plan will eliminate debt for some 20 million people.

Supporters of the plan say it will reduce the racial gap, as black students are more likely to take out loans to help them study and their debts tend to be higher. Four years after graduating, black borrowers have an average of $25,000 more in debt than whites, according to figures from the Brookings Institution.

Still, the move is unlikely to satisfy factions jockeying for influence as the government weighs how much debt to write off and for whom.

Biden has faced pressure from center-left sectors to provide broader relief to hard-hit borrowers, while moderates and Republicans question the fairness of any blanket forgiveness.

The delay in Biden’s decision only increased expectations, which is why his own aides recognize that it represents a political situation without a way out.

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