Last updated on July 18th, 2023 at 01:55 pm
President Biden extended the repayment freeze, expanded loan forgiveness, and canceled $10,000-$20,000 in student loan debt for those making under $125,000.
Biden Announces Plan To Help Working And Middle-Class Americans With Student Loan Debt
The White House tweeted:
In keeping with my campaign promise, my Administration is announcing a plan to give working and middle class families breathing room as they prepare to resume federal student loan payments in January 2023.
I'll have more details this afternoon. pic.twitter.com/kuZNqoMe4I
— President Biden (@POTUS) August 24, 2022
What Biden Is Doing To Help With The Student Debt Crisis
According to a White House fact sheet:
- Provide targeted debt relief to address the financial harms of the pandemic, fulfilling the President’s campaign commitment. The Department of Education will provide up to $20,000 in debt cancellation to Pell Grant recipients with loans held by the Department of Education, and up to $10,000 in debt cancellation to non-Pell Grant recipients. Borrowers are eligible for this relief if their individual income is less than $125,000 ($250,000 for married couples). No high-income individual or high-income household – in the top 5% of incomes – will benefit from this action. To ensure a smooth transition to repayment and prevent unnecessary defaults, the pause on federal student loan repayment will be extended one final time through December 31, 2022. Borrowers should expect to resume payment in January 2023.
- Make the student loan system more manageable for current and future borrowers by:
- Cutting monthly payments in half for undergraduate loans. The Department of Education is proposing a new income-driven repayment plan that protects more low-income borrowers from making any payments and caps monthly payments for undergraduate loans at 5% of a borrower’s discretionary income—half of the rate that borrowers must pay now under most existing plans. This means that the average annual student loan payment will be lowered by more than $1,000 for both current and future borrowers.
- Fixing the broken Public Service Loan Forgiveness (PSLF) program by proposing a rule that borrowers who have worked at a nonprofit, in the military, or in federal, state, tribal, or local government, receive appropriate credit toward loan forgiveness. These improvements will build on temporary changes the Department of Education has already made to PSLF, under which more than 175,000 public servants have already had more than $10 billion in loan forgiveness approved.
- Cutting monthly payments in half for undergraduate loans. The Department of Education is proposing a new income-driven repayment plan that protects more low-income borrowers from making any payments and caps monthly payments for undergraduate loans at 5% of a borrower’s discretionary income—half of the rate that borrowers must pay now under most existing plans. This means that the average annual student loan payment will be lowered by more than $1,000 for both current and future borrowers.
Targeted student loan cancelation is the best way to help the borrowers who are buried under a mountain of student debt but who work in professions where they don’t make huge salaries. For example, public school teachers often have to borrow to pay for their education and do not make large incomes.
Biden is taking action to cancel debt for working-class Americans.
The Biden presidency has been focused on working and middle-class Americans and this action by the president demonstrates his commitment to the people who are the real drivers of the US economy.
President Biden is the most middle-class-focused American president in years.
Awards and Professional Memberships
Member of the Society of Professional Journalists and The American Political Science Association
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