In a long-awaited announcement, President Joe Biden said that his administration is canceling up to $10,000 in student debt for a large portion of the 45 million Americans burdened by student loans on Wednesday, after years of pressure from progressive activists.
The administration is canceling $10,000 in student debt for individuals making under $125,000 a year, or couples making under $250,000 a year. The cancellation will not be counted as taxable income, and likely includes debt incurred from graduate schooling.
Biden additionally announced that recipients of Pell Grants – funding for undergraduate students with low incomes – will be granted an additional $10,000 in debt forgiveness for a total of $20,000. The plan will allow those with undergraduate loans to cap payments at 5 percent of their monthly income.
The president also said he is extending the student loan payment pause “one final time” until December 31, past the midterm elections, allowing borrowers to hold off on paying their student loans for another four months. The payment pause was set to expire on August 31, or in one week.
“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,” Biden wrote in a tweet on Wednesday morning.
Biden’s announcement came after nearly two years of pressure from student debt activists, who have been urging him to cancel student debt since before he took office.
The plan is far short of what activists have called for – debt advocates have urged Biden to cancel up to $50,000 or cancel all student loans with no income restrictions. As officials in the Education Department have said, placing an income cap on the plan makes it far harder for the government to administer the loan forgiveness and burdens the program with what advocates say are unnecessary hurdles for borrowers.
The Biden administration spent months deliberating over the plan. The administration has been sidetracked by debunked conservative arguments, including those saying that student debt forgiveness will only benefit the wealthiest Americans.
Not only a self-defeating argument – wealthy people largely don’t have student debt – but it has also been disproven by research showing that student debt cancellation is a progressive financial policy that will disproportionately help people with low incomes. Indeed, the administration says that 90 percent of the relief will go toward households with incomes of $75,000 a year or less.
Conservatives have also argued that the plan will carry a high cost, but advocates say that the supposed cost of the plan is moot. A large portion of the debt, especially for borrowers who have larger debt burdens, would never have been paid off.
Progressive lawmakers and debt activists celebrated the announcement. “Today is a day of joy and relief,” wrote Sen. Elizabeth Warren (D-Massachusetts). “President Biden is canceling up to $20,000 of federal student debt for as many as 43 million Americans – a powerful step to help rebuild the middle class. This will be transformative for the lives of working people all across this country.”
Activists pledged to keep fighting for more relief for the millions of Americans who owe more than $10,000 or $20,000 of student debt.
“This didn’t just happen folks. We organized. Now some 20M Americans should be getting student debt relief,” wrote Braxton Brewington, press secretary for the Debt Collective. “This is truly just the beginning – I promise you.”
“If we can cancel $10k we can cancel it all,” the Debt Collective added.
Truthout Is Preparing to Meet Trump’s Agenda With Resistance at Every Turn
Dear Truthout Community,
If you feel rage, despondency, confusion and deep fear today, you are not alone. We’re feeling it too. We are heartsick. Facing down Trump’s fascist agenda, we are desperately worried about the most vulnerable people among us, including our loved ones and everyone in the Truthout community, and our minds are racing a million miles a minute to try to map out all that needs to be done.
We must give ourselves space to grieve and feel our fear, feel our rage, and keep in the forefront of our mind the stark truth that millions of real human lives are on the line. And simultaneously, we’ve got to get to work, take stock of our resources, and prepare to throw ourselves full force into the movement.
Journalism is a linchpin of that movement. Even as we are reeling, we’re summoning up all the energy we can to face down what’s coming, because we know that one of the sharpest weapons against fascism is publishing the truth.
There are many terrifying planks to the Trump agenda, and we plan to devote ourselves to reporting thoroughly on each one and, crucially, covering the movements resisting them. We also recognize that Trump is a dire threat to journalism itself, and that we must take this seriously from the outset.
Last week, the four of us sat down to have some hard but necessary conversations about Truthout under a Trump presidency. How would we defend our publication from an avalanche of far right lawsuits that seek to bankrupt us? How would we keep our reporters safe if they need to cover outbreaks of political violence, or if they are targeted by authorities? How will we urgently produce the practical analysis, tools and movement coverage that you need right now — breaking through our normal routines to meet a terrifying moment in ways that best serve you?
It will be a tough, scary four years to produce social justice-driven journalism. We need to deliver news, strategy, liberatory ideas, tools and movement-sparking solutions with a force that we never have had to before. And at the same time, we desperately need to protect our ability to do so.
We know this is such a painful moment and donations may understandably be the last thing on your mind. But we must ask for your support, which is needed in a new and urgent way.
We promise we will kick into an even higher gear to give you truthful news that cuts against the disinformation and vitriol and hate and violence. We promise to publish analyses that will serve the needs of the movements we all rely on to survive the next four years, and even build for the future. We promise to be responsive, to recognize you as members of our community with a vital stake and voice in this work.
Please dig deep if you can, but a donation of any amount will be a truly meaningful and tangible action in this cataclysmic historical moment.
We’re with you. Let’s do all we can to move forward together.
With love, rage, and solidarity,
Maya, Negin, Saima, and Ziggy