WASHINGTON — President Joe Biden is scheduled to speak Wednesday, after unveiling a plan to forgive as much as $20,000 of student loan debt for some Americans and to extend a pause on loan repayments prompted by the coronavirus pandemic.
As part of the three-part student debt relief plan, the U.S. Department of Education will cancel up to $20,000 worth of debt for Pell Grant recipients and $10,000 worth of debt for those who did not receive Pell Grants, officials said. Borrowers who make more than $125,000 individually or $250,000 as a household are not eligible for the debt cancellation, according to authorities.
Officials are also extending the pause on student loan repayment that was enacted as a response to the coronavirus pandemic until Dec. 31. The pause had been expected to end on Aug. 31.
Biden is scheduled to deliver remarks from the White House at 2:15 p.m., according to a schedule released by officials.
Congress suspended student loan payments in March 2020 while passing the Coronavirus Aid, Relief and Economic Security, or CARES, Act. President Donald Trump subsequently extended the pause through January 2021. After he took office in January, Biden directed the Department of Education to pause federal student loan payments several more times.
In the second quarter of 2022, the Federal Reserve estimated that Americans owed more than $1.7 trillion in student loans.
Forgiving $10,000 of student loan debt for each borrower paying back federally owned student loans would cost an estimated $321 billion and eliminate payments for 11.8 million borrowers, accounting for 31% of the total student debt, officials with the Federal Reserve Bank of New York said in April. The analysis did not account for the income limit reportedly being considered by Biden on Wednesday.
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