It's been several weeks since the last update from the administration regarding fulfilling the campaign promise to cancel student loan debt.
President Joe Biden has given an update on where things stand with proposed wide-scale student loan debt cancelation plans. Finally, following several weeks of no movement — or at least no public movement — on his plans to address his campaign promise to cancel $10,000 of federal student loan debt, it looks like there will be an answer as to what he will do, exactly, and how he will do it, soon.
It's been several weeks since the last update from the administration regarding Biden’s campaign promise to cancel student loan debt.
At that time, Biden was reportedly planning to place an income cap on who could qualify for student loan cancelation. Reports indicated the plan would likely include $10,000 in relief for federal borrowers and forgiveness would be limited to people who made less than $150,000 the year prior for single filers or less than $300,000 for couples who file jointly.
Advocates warn that the proposed $10,000 in cancelation will not be enough. Though it would cancel debt completely for about a third of borrowers, it would leave many more on the hook for debt they already could not pay down before the extended pandemic payment pause.
Debt Collective — the nation's first debtors' union — has been vocal about where they stand on the proposed plan, saying that $10,000 per person is nowhere near enough.
Other experts say another effective way to reduce the financial burden of student debt going forward would be to eliminate interest on student debt, according to Bloomberg. Experts argue that eliminating interest would likely save each borrower more than the proposed $10,000 in the long run.
The pandemic interest freeze on federally held loans is set to expire on August 31, so the pressure to announce a more permanent fix is mounting.
As of June 2022, 45 million Americans hold student debt totaling $1.75 trillion, at an average of $28,950 in debt held per borrower. Polls show that most millennials favor significant debt cancelation for federally-held student loans.