White House Said To Eye Income Caps For Student Loan Forgiveness

Topline

The White House is weighing income limits for student loan forgiveness, the Washington Post reported Saturday, days after President Joe Biden said he may cancel “some” debt and indicated he is coming closer to a decision on the issue within the next few weeks.

President Joe Biden answers questions in the Roosevelt Room of The White House on Thursday April 28, … [+] 2022. (Photo by Demetrius Freeman/The Washington Post via Getty Images)

The Washington Post via Getty Images

Key Facts

White House officials have considered limiting relief to individual tax filers who made less than either $125,000 or $150,000 in the previous year, three people familiar with the discussions told the Post.

For couples who file their taxes jointly, the cap could reportedly be $250,000 to $300,000.

The Post reports the planning is still in flux and that the numbers or requirements could change before Biden makes a final decision.

The reported income caps come after Biden said Thursday he was taking a “hard look” at loan forgiveness, though he ruled out canceling $50,000 per borrower.

Bloomberg reported Friday the Biden administration may forgive at least $10,000 per borrower, citing anonymous sources familiar with the matter, but noted the specifics of the proposal have not been fleshed out.

Key Background

A moratorium on student loan payments has been in place since the start of the Covid-19 pandemic, and has been extended six times since March 2020. Biden’s latest order extends the pause until August 31, and Democrats have urged the president to take action on canceling some, if not all, of the debt. Some Democratic lawmakers, including Senate Majority Leader Chuck Schumer (D-N.Y.), have pushed for the administration to cancel at least $50,000 per borrower. Republicans have argued against forgiveness, saying it would add to inflation issues in the country, or that it is an attempt for Biden and Democrats to improve their approval rating ahead of the midterm elections later this year.

Chief Critic

Sen. Mitt Romney (R-Utah) compared canceling student debt to a “bribe” in a tweet, and Florida Gov. Ron DeSantis (R) called the move “wrong” during a press conference after claiming 60% of student loan debt was taken out by graduate students. According to the Education Data Initiative, graduate students borrow about 37% of federal student loan dollars.

What To Watch For

Biden said during a press conference Thursday he will “have an answer in the next couple weeks” on his plans for student loan relief.

Big Number

43.4 million. That’s how many people have federal student loan debt, according to the Education Data Initiative. The average balance is $37,113 per borrower.