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President Biden expected to announce plans to cancel $10K in loan debt for borrowers making less than $125K

Posted at 5:35 AM, Aug 24, 2022
and last updated 2022-08-24 12:04:43-04

UPDATE: Biden forgiving up to $20K in student loan debt

President Biden is expected to announce plans to cancel $10,000 in loan debt for borrowers earning less than $125,000 per year on Wednesday.

Almost one-third of 43 million Americans with federal student loan debt owe less than $10,000. For those people, this could be a game changer and a win for the Biden administration as one of his campaign promises was to address student loan debt.

But critics also point to inflation and how this could stall efforts to curb it.

“We need to make college affordable, not send a $10,000 gift to people that already have in many cases already advanced degrees," Marc Goldwein with the Committee for a Responsible Federal Budget said.

The long-delayed move to address student debt does not go as far as more progressive democrats have pushed for. They say the income cap narrows a campaign promise from Biden’s administration.

"The president understands how student loans could affect a family and how the pressure of that can really be a lot," White House Press Secretary Karine Jean-Pierre said.

It would clear balances for millions of Americans, and wipe away at least half of student loan debt for millions more, according to the latest federal data.

"I personally think it's a good start. At least for a lot of people, it's going to make a big difference," one graduate student said.

But as inflation surges this plan isn’t without skeptics either. Some experts say it could be challenged in court.

"The president, through the secretary of education, does have the power to adjust the amount of loan principal that any borrower has. Now a court could decide they want to interpret it in a different way, and they're going to read it as only applying to smaller amounts of debt cancellation," Law Professor at Fordham University John Brooks said.

Another concern is that this move could prompt colleges to up tuition.