President Biden is expected to make an announcement on student loan relief on Wednesday, according to two sources familiar with the matter.
It’s not clear yet exactly what the president will ultimately announce, however. Canceling $10,000 in student loan debt for borrowers who make up to $125,000 is one of the possibilities, one source familiar with the discussions said. NBC News first reported the timing of Mr. Biden’s announcement.
It’s also possible the administration may merely extend the pause on student loan payments again for now and wait to make an announcement on canceling any student loan debt.
Sources said the president said he would make a decision before Aug. 31, and he’s still on track to do that.
A Penn Wharton Budget Model analysis concludes forgiving $10,000 of student loan debt for those earning up to $125,000 a year would cost nearly $300 billion in the first year. It also found more than two-thirds of the debt forgiveness would aid Americans in the top 60% of earners.
Low-income Americans who never attended college and are struggling financially amid record-high inflation would not benefit from any debt cancelation, critics of student debt cancellation point out. Erasing some student loan debt also would not address the rising cost of college, which has historically outpaced inflation in recent decades.
The pause on student loan repayment began under the Trump administration at the onset of the pandemic, and Mr. Biden has paused student loan repayments a total of four times since he took office. The current pause ends after Aug. 31, after which, borrowers would have to begin to repay their debt again if there is not another extension.