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Biden announces plan to forgive up to $10,000 in federal student loans, extends payment pause [1]
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Date: 2022-08-24
President Joe Biden is set to announce Wednesday his long-anticipated plan to forgive up to $10,000 in federal student loans for millions of Americans and extend a pause on payments until January.
The Associated Press , citing three people familiar with the plan, said Biden planned to make the announcement on Wednesday. It would fulfill a key Biden campaign promise, but the plan is likely to leave some disappointed. The plan would apply only to federal student loans, not private ones.
The AP wrote:
pressure from liberals to provide broader relief to hard-hit borrowers, and from moderates and Republicans questioning the fairness of any widespread forgiveness. The delay in Biden’s decision has only heightened the anticipation for what his own aides acknowledge represents a political no-win situation. The people spoke on the condition of anonymity to discuss Biden’s intended announcement ahead of time. Biden has facedto provide broader relief to hard-hit borrowers, and from moderates and Republicans questioning the fairness of any widespread forgiveness. Thehas only heightened the anticipation for what his own aides acknowledge represents a political no-win situation. The people spoke on the condition of anonymity to discuss Biden’s intended announcement ahead of time. The precise details of Biden’s plan, which will include an income cap limiting the forgiveness to only those earning less than $125,000 a year, were being kept to an unusually small circle within the Biden administration and were still not finalized on the eve of the announcement. … The plan would likely eliminate student debt entirely for millions of Americans and wipe away at least half for millions more. The nation’s federal student debt now tops $1.6 trillion after ballooning for years. More than 43 million Americans have federal student debt, with almost a third owing less than $10,000 and more than half owing less than $20,000, according to the latest federal data.
Biden was also expected to continue until January the pandemic-era freeze on student loan payments that was due to expire on Aug. 31.
Sens. Bernie Sanders and Elizabeth Warren had proposed student debt cancellations of $50,000 or more when they were challenging Biden for the Democratic presidential nomination.
During the 2020 campaign, Biden had proposed student debt cancellation of $10,000 per borrower, with no provision for an income cap.
Democrats are hoping that the student debt cancellation program can help motivate young people to vote in the November midterms.
Although Biden’s plan is narrower than what he initially proposed during the campaign, “he’ll get a lot of credit for following through on something that he was committed to,” Democratic pollster Celinda Lake told the AP.
But Biden’s plan is likely to face criticism from both the left and the right.
“If the rumors are true, we’ve got a problem,” Derrick Johnson, the president of the NAACP, told the AP on Tuesday. He had called for bolder action on student debt cancellation
Meanwhile, the Republican National Committee issued a statement claiming Biden was offering “a handout to the rich” that was unfair to lower-income taxpayers and those who had already paid off their student loans.
The Biden administration had previously canceled nearly $32 billion in outstanding federal student debt through forgiveness programs for public-sector workers, disabled borrowers and students who were defrauded by for-profit colleges, according to CNN.
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