Student loans: Report says latest plan would forgive $10,000 in student debt

After months of deliberation and two years of extending a pause on student loan repayments, President Joe Biden is expected to announce a plan to cancel $10,000 in student debt per borrower, The Washington Post is reporting.

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The Post, citing three people with knowledge of the plan, said Biden hoped to make the announcement as soon as this weekend at the University of Delaware commencement, but the timing and the details of the program are still unclear.

The plan is expected to call for limiting debt forgiveness to Americans who earned less than $150,000 in the previous year, or less than $300,000 for married couples filing jointly, the Post reported.

CNN is reporting that an order to cancel some student loan debt has been drafted but not yet signed as Biden is still deciding whether to proceed with it.

“No decisions have been made yet,” Vedant Patel, a White House spokesperson, told Reuters on Friday.

According to Forbes, the White House is denying the report of a decision on forgiving some portion of the debt, saying Biden is still considering options and has not settled on a plan.

Earlier this month, a group of Republican senators introduced a bill that would prohibit student-loan forgiveness.

The Student Loan Accountability Act would prohibit the Education, Justice, and Treasury Departments from taking any action that would forgive student-loan borrowers’ debt.

Republican Sens. Richard Burr and Thom Tillis of North Carolina, Tim Scott of South Carolina, and Bill Cassidy of Louisiana joined Mitt Romney of Utah in introducing the bill.

The bill is unlikely to become law anytime soon with a 50-50 Senate, a Democratic-controlled House, and Biden in the Oval Office.

“It makes no sense for the Biden Administration to cancel nearly $2 trillion in student loan debt,” Romney said in a statement.

“This decision would not only be unfair to those who already repaid their loans or decided to pursue alternative education paths, but it would be wildly inflationary at a time of already historic inflation,” Romney said.

The bill is not likely to pass with a Senate that is split 50-50.

He has pledged to consider some debt relief, but has said he will not consider canceling $50,000 in student loan debt per borrower as some in his party are urging him to do.

Biden has already canceled $18.5 billion of student loans for 750,000 student loan borrowers.

It is not clear whether interest and payments would resume at the end of August, when they were set to begin again after several extensions during the COVID-19 pandemic.

Wiping out $10,000 of debt per borrower could cost roughly $230 billion, according to estimates by the Committee for a Responsible Federal Budget, a nonpartisan think tank.