Michael Stratford and Eugene Daniels
August 24, 2022
The Biden administration on Wednesday announced it was canceling up to $10,000 of student debt for millions of people and up to $20,000 of debt for low- and middle-income borrowers who previously received a Pell grant.
The loan relief will be limited to borrowers who earn less than $125,000 a year or families earning less than $250,000. In addition, the White House plans to extend the moratorium on monthly payments and interest for a “final time” through Dec. 31.
On a call with reporters, administration officials said the combination of forgiveness and restarting payments in January would “largely offset” each other, a rebuttal to criticism that the key elements of the plans would increase inflation.
The officials also touted a plan already in the works at the Education Department to overhaul the current student loan repayment system. That income-driven plan would cut monthly payments in half for undergrads and propose a permanent rule change in the Public Service Loan relief program to make it easier to receive loan forgiveness credit for people with jobs in the military, nonprofit or government.