Here’s What Biden Might Do

Topline

With President Joe Biden set to make a much anticipated decision on forgiving federal student loan debt in the coming days, here’s a timeline of what to expect, how much borrowers may get in relief and who may actually qualify for forgiveness.

President Joe Biden speaks at the White House last week.

Los Angeles Times via Getty Images

Key Facts

The 29-month long pause on federal student loan repayments is set to expire next Wednesday, August 31.

Biden is widely expected to extend the moratorium because loan servicers have not been instructed to inform borrowers of an upcoming payment deadline, and Education Secretary Miguel Cardona told Meet the Press on Sunday the White House will make an announcement on student loans “within the next week or so.”

Many interpret recent comments from Cardona and other White House officials as an indication Biden will finally announce his wider plan to address student loan relief, finally bringing his campaign promise to address the student loan crisis to a head.

CNN reported Monday Biden could reveal his overarching student debt relief plan as soon as Wednesday, citing anonymous sources.

How much Biden will forgive remains up in the air, though CNN reported Monday the plan is to forgive $10,000 per borrower, matching a Bloomberg report last month.

Not all indebted Americans will get relief, however: The White House is considering forgiving debt only for those who make less than $125,000 annually, according to Bloomberg and CNN.

Big Number

43 million. That’s the number of Americans with federal student loan debt. There is about $1.6 trillion in outstanding federal student loan debt, and government loan debt accounts for over 90% of all student loan debt.

Contra

Biden’s impending decision on student loan forgiveness is sure to receive backlash from both ends of the political spectrum, with many Republican lawmakers like Senate Minority Leader Mitch McConnell (R-Ky.) warning it will worsen inflation, while progressives like Senate Majority Leader Chuck Schumer (D-N.Y.) plead for at least $50,000 in relief per borrower. Polling finds support for student loan forgiveness is sharply divided by party lines, as a Morning Consult/Politico poll in June and an Economist/YouGov poll in July respectively found 71% and 72% of Democrats support $10,000 in federal student loan debt relief, while just 31% and 28% Republican respondents to the respective polls support the measure.

Key Background

Biden said during his campaign, in March 2020, he supported forgiving a “minimum” of $10,000 in federal student loan debt, while top rivals Sens. Elizabeth Warren (D.-Mass) and Bernie Sanders (I-Vt.) vowed to cancel all student debt That same month, as the Covid pandemic began to impact the economy, President Donald Trump announced a moratorium on federal student loan repayments, a pause that has since been extended by Trump and then Biden five additional times.