The Biden administration will cancel up to $10,000 in student loan debt per borrower, according to sources with knowledge of the White House’s as-yet unannounced plans.
While any amount of student debt forgiveness would be beneficial to a certain degree, experts have noted that the $10,000 amount will do very little to address the magnitude of the crisis.
According to sources who spoke with The Washington Post, the forgiveness plan would erase debt amounts up to $10,000 for every borrower in the country that meets a certain set of criteria. Borrowers who earn incomes higher than $150,000 (or $300,000 for married couples filing their taxes jointly) would not be eligible for the student loan forgiveness, for example.
President Joe Biden intended to announce his student debt forgiveness plan earlier this week, but postponed his announcement due to the school shooting in Uvalde, Texas.
The details of the plan have not been released, and it is still unclear whether the White House will further extend the student loan payment pause when the current extension ends in August. The White House has also cautioned that decisions on debt forgiveness have not yet been finalized.
Upon the reporting being published, however, many weighed in on the meager spending proposal on social media.
“This is woefully inadequate,” wrote Philadelphia Inquirer columnist Will Bunch, adding:
This fall, millions — disproportionately Black and Brown, convinced the American Dream was hopeless unless they borrowed tens of thousands of dollars — will likely have to resume payments, and be worse off.
The plan is a “plug-a-small-leak fix for a collapsing dam,” Bunch said.
Progressive advocate Nina Turner, a former Ohio state senator, described the plan as falling “woefully short.”
“If [Biden] can cancel $10k, he can cancel it all,” Turner said.
The Debt Collective, the nation’s first debtors’ union, slammed the proposal as being almost as bad as doing nothing at all.
“Biden’s latest plan is to cancel $10,000 for *some* borrowers. But the interest builds so quickly that $10k will be back in just a few months for many,” the organization said.
A more expansive forgiveness plan would result in better outcomes for a higher number of borrowers, particularly people of color, who disproportionately carry the burden of student debt.
A report compiled by researchers for Sen. Elizabeth Warren (D-Massachusetts) and published earlier this month found that a $10,000 per borrower forgiveness plan would only cancel out the balances of around 32 percent of people with student debt. (That report did not account for income limits, which would likely mean that Biden’s plan will impact an even smaller number of borrowers.)
A plan to forgive up to $50,000 in student loans, however, could reach up to three-quarters of all borrowers, which would have a positive impact on the economy while also addressing wealth inequality and advancing racial justice.
“The more President Biden cancels, the more we narrow the racial wealth gap among borrowers and the bigger the boost to Americans’ economic futures,” Warren said at the time of the report’s publication.
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