The White House has denied a report that President Joe Biden will enact $10,000 of student loan forgiveness.
Here’s what you need to know — and what it means for your student loans.
Will your student loans get canceled? That’s the question student loan borrowers have been asking for months. “No decisions have been made yet,” White House spokesman Vedant Patel told Reuters on Friday. The White House denied a report from the Washington Post that claims:
- Biden will cancel $10,000 of student loans per student loan borrower; and
- Student loan forgiveness will be available to individual student loan borrowers who earn up to $150,000 in annual income, or married couples who file jointly and earn up to $300,000.
Earlier this month, the Biden administration floated this same income cap to qualify for student loan forgiveness. Notably, this potential income cap is $50,000 higher than the income cap on the Covid-19 stimulus checks, which were pegged at $75,000 for individuals.
Biden could cancel student loans tomorrow
Will Biden cancel student loan debt tomorrow? Biden is delivering the commencement address at the University of Delaware, his alma mater, tomorrow. While the White House says Biden hasn’t decided on wide-scale student loan forgiveness, the president could use tomorrow’s graduation as an opportunity to announce his intentions on student loan relief. Whether Biden shares a full-scale plan or provides an updated timetable on a decision, the president could reference the next steps for student loan borrowers. On April 28, Biden said he would decide whether to proceed with wide-scale student loan cancellation within weeks. However, that was more than four weeks ago. If Bidens announces an update on student loan forgiveness, it would be the second major education policy plan in the past week. For example, the U.S. Department of Education announced a major overhaul of student loan servicing.
Student loan cancellation: next steps
The Biden administration is reiterating that student loan borrowers haven’t been required to pay a single dollar of their federal student loans since Biden became president. Biden has now canceled $18.5 billion of student loans for 750,000 student loan borrowers. The president has said he’s not considering a plan to forgive $50,000 of student loan debt, which progressive Democrats in Congress have championed. If Biden cancels $50,000 of student loan debt, it would eliminate federal student loan debt for 36 million student loan borrowers. However, since the 2020 presidential election, Biden has remained focused on $10,000 of student loan forgiveness. A group of senators, led by Sen. Elizabeth Warren (D-MA), are still lobbying Biden to consider $50,000 of student debt relief. They have asked the president to postpone a decision on wide-scale student loan forgiveness, which could be one reason that Biden doesn’t announce a plan to cancel student loan debt at tomorrow’s graduation. The next major deadline for student loan borrowers is the end of temporary student loan relief on August 31, 2022. Regardless of Biden’s announcement on student loan forgiveness, pay close attention to the end of the student loan payment pause. Ideally, you should have a game plan in place before student loan payments restart. Consider these popular options for student loan repayment:
- Student loan refinancing (lower interest rate + lower payment)
- Income-driven repayment (lower payment)
- Student loan forgiveness (federal student loans)