How Would Student-Loan Forgiveness Really Work?
Eric Kelderman
June 8, 2022
Nearly 18 months into the term of President Biden, his administration continues to grapple with whether and how to provide blanket forgiveness to the more than 40 million people who hold nearly $1.6 trillion in student-loan debt.
Since he was a candidate in 2020, the president has consistently said he wanted to erase up to $10,000 of debt for each borrower, preferably by an act of Congress rather than executive action. So far, Congress has failed to act, and Biden’s campaign proposal remains just that, with little indication from the administration if or when an executive action will be announced. The White House has denied that any plan is imminent, though news accounts in The Washington Post and The Wall Street Journal indicate otherwise.
Those reports outline a plan consistent with the president’s original target amount, perhaps with an income cap to limit who will be eligible. Such a measure would erase the debt of nearly a third of borrowers and halve the debt of an additional 20 percent.
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