President Joe Biden is planning to announce on Wednesday that he will forgive up to $10,000 of student debt for millions of people and up to $20,000 of debt for low- and middle-income borrowers who previously received a Pell grant, according to several people familiar with the plans.
The loan relief will be limited to borrowers who earn less than $125,000 a year or families earning less than $250,000. In addition, the White House plans to extend the moratorium on monthly payments and interest for a “final time” through Dec. 31.
The White House will also tout a plan, already in the works at the Education Department, to create a more generous income-driven repayment plan. The proposal is set to cut monthly payments in half for undergraduate student loan borrowers.
Several people familiar with the administration’s discussions emphasized that Biden had not made a final decision on key parts of the debt relief program by late Tuesday evening. The president left his vacation home in Rehoboth Beach, Del., on Wednesday morning to return to the White House in anticipation of an announcement.
Senate Majority Leader Chuck Schumer, a leading proponent of canceling student debt, urged Biden to provide as much relief to borrowers as possible during a phone call with the president on Tuesday evening, according to a Democrat familiar with the discussion.
Schumer told Biden in his final pitch that canceling debt is “the right thing to do morally and economically,” the Democrat said.
The call followed a discussion that senior White House officials, including chief of staff Ron Klain, had with Schumer and Sens. Elizabeth Warren (D-Mass.) and Raphael Warnock (D-Ga.), the leaders of the effort to convince Biden to cancel student loan debt ever since he took office.
The eleventh-hour deliberations over debt relief come as the White House stares down a self-imposed deadline for addressing the issue. The pandemic-related moratorium on interest and payments, which started in March 2020 in the Trump administration and has been extended four times by Biden, is set to expire Aug. 31.
Progressives, civil rights organizations and labor unions have all urged the Biden administration to provide large amounts — as much as $50,000 per borrower — of loan forgiveness to people across-the-board. And they signaled on Tuesday their disappointment with any policy that stops short of sweeping relief.
Derrick Johnson, president of the NAACP, made clear that $10,000 of debt relief per borrower would be insufficient for addressing the racial inequities in student loan debt. “If the rumors are true, we’ve got a problem,” Johnson said in a statement.
“President Biden’s decision on student debt cannot become the latest example of a policy that has left Black people — especially Black women — behind,” he added. “This is not how you treat Black voters who turned out in record numbers and provided 90 percent of their vote to once again save democracy in 2020.”