Report: White House Potentially Leaning Towards Shaving Off Up to $10,000 From Student Loan Debts

The Biden Administration is eyeing $10,000 in student loan forgiveness for borrowers who make less than $125,000 annually. While President Joe Biden ran on a platform in which he declared that student loan cancellations should be done “immediately,” he has largely implemented payment pauses for the majority of borrowers since taking office.

On Monday, CNN reported that the White House is leaning towards shaving up to $10,000 in student loans for borrowers who make $125,000 or less a year. The Biden Administration is also rumored to be discussing additional loan options for certain subsets of the population.

However, aside from payment pauses for the majority of borrowers, President Joe Biden has managed to cancel nearly $32 billion in loans, including $9 billion for borrowers suffering from a permanent disability.

The student loan forgiveness program may be announced as soon as Wednesday, sources told CNN.

Since March 2020, Biden has placed a freeze on federal student loan repayments, and has extended the repayment pause four times since it was first put into place to help those economically suffering from the effects of the COVID-19 pandemic.

Biden most recently extended that pause in April, and with the moratorium set to expire on August 31, the White House is being pressured to release their plans on student loan forgiveness.

“We know Aug. 31 is a date that many people are waiting to hear something from,” United States Secretary Miguel Cardona said. “We’ve been talking daily about this and I can tell you that the American people will hear within the next week or so from the president and the Department of Education on what we’re going to be doing around that.”

According to a survey from July, about 34% of 1,500 Americans who were surveyed “strongly support” a $10,000 federal student loan debt cancellation, while 26% “strongly oppose” the idea. But at least 59% of Americans are worried that student loan forgiveness will worsen inflation.

About 44 million borrowers make up a combined $1.7 trillion in federal loan debt. Biden’s proposal of $10,000 per borrower would amount to $321 billion in total.

But some experts have argued that the effect on inflation would be “small to moderate,” according to Adam Looney, an economist and finance professor at the University of Utah who focuses on higher education policy. The reason being that student loan forgiveness would have a slow effect on Americans’ wallets compared to the lumped sums of stimulus checks they received from both the Trump administration and the Biden administration.

While Republicans worry about a bump to inflation, Democrats are getting impatient with promises made by Biden when he was campaigning to become president. Last week, Senate Majority Leader Chuck Schumer, Democratic Senator Elizabeth Warren of Massachusetts, and Democratic Senator Raphael Warnock of Georgia reportedly spoke with senior White House officials about the issue, which was integral to Biden's platform while running for president.