President Joe Biden is expected to announce his decision to forgive student loan debt as soon as Wednesday, Reuters is reporting.
The current government pause in student interest and payments due to COVID-19 expires at the end of August.
It is also believed that Biden will announce whether he plans to extend the pause on student-debt repayments. Federal student loans are currently in COVID-related forbearance and payments have been paused until Aug. 31.
A source with knowledge of the matter told CNN on Tuesday that Biden will likely announce that the government intends to forgive up to $10,000 in federal loan debt to individuals who make $125,000 or less a year.
Borrowers are not required to make payments on their loans and interest rates have been set to 0%. The last time federal student loan payments were due was March 2020, the month the COVID-19 pandemic began.
Nearly 12 million borrowers (about one-third of federal loan borrowers) would have their entire balance eliminated if $10,000 is forgiven. It would cut total debt by at least half for another 20%, according to data from the Education Department.
Forgiving $10,000 per student would cost around $321 billion, government economists say.
Biden had been pressed to forgive up to $50,000 in federal student loan debt. He said he would not consider that amount.