Biden Announces Student Loan Forgiveness Plan - Biden To Cancel $10,000 In Student Debt
President Joe Biden made a big announcement about student loan debt on Wednesday. He said that up to $20,000 of debt will be forgiven for millions of borrowers, and the payment freeze will be extended one last time until the end of the year. Biden said on Wednesday that borrowers who make less than $125,000 a year will get a $10,000 loan forgiveness from his administration. People with low incomes who went to college with the help of Pell Grants will get up to $20,000 in loan forgiveness.
Author:Hajra ShannonReviewer:Paula M. GrahamAug 25, 20221.4K Shares98.8K Views
President Biden announces student loan forgiveness planon Wednesday to help tens of millions of Americans get rid of large amounts of student loan debt.
He said he would cancel $10,000 of debt for people who make less than $125,000 per year and $20,000 of debt for people who got Pell grants for low-income families.
Even though the debt forgiveness is less than what some Democrats wanted, it comes after the White House spent months talking about fairness and worries that it could make inflation worse before the midterm elections.
“„“All of this means people can start finally to climb out from under that mountain of debt,” Mr. Biden said in remarks from the White House. “To finally think about buying a home or starting a family or starting a business. And by the way, when this happens, the whole economy is better off.”
President Biden Announces Student Loan Forgiveness Plan
Biden announces student loan forgiveness plan
Biden will take away up to $20,000 from the debts of people who get Pell Grants.
“„“Both of these targeted actions are for families who need it the most,” the president said in remarks from the White House on Wednesday afternoon.
The help will only go to people who make less than $125,000 per year, or $250,000 for married couples or people who live alone.
The Education Department says that the relief is limited to the amount of a borrower's outstanding eligible debt.
The president will also "one last time" stop payments on most federal student loans until December 31, 2022, the tweet said.
In his speech, Biden said that the plan would help about 43 million people or 95% of the people who took out loans.
Over 60% of those people get Pell Grants.
Biden said that almost 20 million people, or almost 45% of all borrowers, would have their debts completely wiped out.
“„Biden said, "That means 20 million people can get on with their lives. This means that people can finally start to get out from under their debt. To pay their rent and all of their bills. To finally think about buying a house, starting a family, or starting a business."
Mark Kantrowitz, an expert on higher education, says that Biden's plan to forgive $10,000 of student debt for people who earn less than $125,000 will cost the federal government about $244 billion.
The $120 billion that could be added to the government's costs by giving Pell Grant recipients an extra $20,000.
The White House is doing something that has never been done before: they are getting rid of hundreds of billions of dollars of consumer debt.
This comes after years of pressure from advocates and months of heated debate among Biden administration officials.
People talked about how canceling student loans might affect the high inflation that hurts Americans' wallets.
They also talked about how much student debt should be canceled and if the president has the power to do that without the legislature.
Conclusion
Many Americans, even those who never took out loans for school or went to college, will be upset by the news.
Rep. Kevin Brady, R-Texas, the ranking member of the House Ways and Means Committee, recently said that forgiving student loans were "a giveaway to highly educated college grads."
Some Republicans say they will try to stop the president from getting rid of the debt.
Critics of student loan forgiveness have asked if it's fair to help people who are better off because they went to college and now make more money.
In the meantime, Biden has taken a more focused approach to help students pay off their debt.
Most of what he has done has been to make federal student loan forgiveness programs bigger and easier to use.
So far, Biden's administration has given permission to cancel $32 billion in loans, which is more than any other administration.
This is mostly for borrowers who were scammed by their for-profit colleges and for borrowers who are permanently disabled.
Hajra Shannon
Author
Paula M. Graham
Reviewer
Latest Articles
Popular Articles