Biden to Unveil Long-Awaited Student Debt Relief Measures on Wednesday
2022.08.23 19:18
© Bloomberg. Joe Biden Photographer: Yuri Gripas/Abaca/Bloomberg
(Bloomberg) — The White House plans to make its long-awaited announcement on student debt relief Wednesday, according to people familiar with the timing.
The substance of the announcement is not yet clear and is being closely guarded by the White House, which did not immediately respond to a request for comment. President Joe Biden’s decision has been long anticipated as he grapples with delivering targeted relief while weighing any fallout, including on already-rampant inflation.
Advocates and allies expect Biden to extend the pause on student loan repayment for at least four additional months through December 2022, while also announcing some measure of debt forgiveness for borrowers whose income falls below a certain threshold. That would bring the freeze beyond the midterm elections, in which Democrats are hoping to stave off a loss of their slim House and Senate majorities.
For months, Democratic lawmakers, labor leaders and civil-rights groups have been pressuring the White House to forgive more than $10,000 in student debt, arguing higher debt loads are disproportionately carried by Black or lower-income students.
Read more: Biden’s Slow-Walk on Student Loans Means Pressure to Go Big
During the 2020 presidential campaign, Biden himself urged Congress to forgive $10,000 in student debt and has appeared comfortable with that figure.
Former top Democratic officials have warned about the inflationary impact of a broader move. Former Treasury Secretary Larry Summers has warned that it would fuel price growth and said the “worst idea” would be to extend a pause on payments.
Forgiving student loan debt will cost between $300 billion and $980 billion over 10 years, depending on the scope, with the majority of relief going toward borrowers in the top 60% of earners, an analysis released Tuesday found.
The Biden administration has already cancelled $32 billion in total debt, including by targeting relief to institutions that had predatory or misleading practices. The current payment pause expires at the end of the month.
“From day one, we’ve been really focused on making sure we’re protecting our students and our borrowers,” Education Secretary Miguel Cardona told NBC’s “Meet the Press” on Sunday. “We know August 31st is a date that many people are waiting to hear something from. We’ve been talking daily about this. And I can tell you that American people will hear within the next week or so from the president.”
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