The moment has finally arrived. The Biden administration announced on Wednesday that it is moving forward with its promise to partially cancel student debt.
President Joseph R. Biden
To qualify, individuals must earn less than $125,000 a year and families must earn less than $250,000. Biden said those restrictions will make it so “no high-income individual or high-income household, in the top 5% of income, will benefit from this action, period.”
“In fact,” Biden added, “About 90% of the eligible beneficiaries make under $75,000 a family.”
The Biden-Harris administration anticipates this action will impact 95% of student loan borrowers, or roughly 43 million people. Almost 45% of student debt holders will see their debt fully cancelled, Biden said, equaling “20 million people who can start getting on with their lives.”
Biden also announced the student loan repayment pause, issued due to the COVID-19 pandemic, will cease at the end of this year. These changes come on top of the Public Service Loan Forgiveness waiver and debt cancellation of students defrauded by predatory institutions, totaling $32 billion in student debt relief for 1.6 million Americans.
Some economists said this newest cancellation could spell greater trouble for future students as this solution does not address the increasing costs of college. While some experts in higher education are thrilled to see the Biden administration finally act, others say this forgiveness is not nearly enough to make a tangible difference in borrowers’ lives.
