The long awaited announcement on student loan forgiveness is happening today. According to the Associated Press, $10,000 worth of student debt is set to be forgiven for borrowers making less than $125,000 a year. President Biden is also expected to continue a pause on payments first put in place at the start of the pandemic.
These details are expected to come in an announcement from President Biden today when he arrives back at the White House later Wednesday morning. Some sort of student relief was a campaign promise from President Biden. It has been stalled but perhaps with reason as we approach midterms.
Although the decision on student loan forgiveness has the potential to motive democrats ahead of November, before the decision is even announced, it has been met with criticism from both sides of the aisle. Democrats are asking for more while republicans say it’s already too much.
“The average amount of debt forgiveness to businesses receiving PPP loans: $95,700,” Sen. Bernie Sanders (D-NY) said in a tweet. “If we could afford to cancel hundreds of billions in PPP loans to business owners in their time of need, please do not tell me we can’t afford to cancel all student debt for 45 million Americans.”
“It’s a giveaway to highly educated college grads,” Rep. Kevin Brady, (R-TX) said. “It will make rising costs worse, rather than address the costs of colleges.”
Rep. Tom Rice (R-SC) points to possible legal issues with the debt forgiveness announcement. Rice said President Joe Biden’s plan to possibly forgive student debt through executive action was also on “incredibly shaky legal ground.” Some GOP legislators have said they’ll try to block an effort by the president to cancel debt without Congress.
According to a recent analysis, the student debt cancellation would cost $300 billion dollars. The Penn Wharton Budget Model also estimates about 70 percent of debt relief accrues to borrowers in the top 60 percent of the income distribution. It would wipe away student debt for about one third of borrowers but would significantly benefit those in higher income brackets.
