The student loan decision

President Biden announced plans yesterday to cancel $10,000 in federal student loan debt for all borrowers earning less than $125,000 per year, or couples making less than $250,000/year. Those who received federal Pell Grants, which are for college students with “exceptional financial need,” and who fall under the income levels mentioned above will have $20,000 forgiven.

🎓📝 More deets… Biden’s decision covers an estimated 43 million of the 45+ million Americans who owe around $1.6 trillion in federal student debt, per a White House fact sheet. It’s also projected to completely wipe away the remaining balance for some 20 million borrowers.

• The White House’s plan will end up costing the federal government ~$300 billion, per an analysis from the nonpartisan Penn Wharton Budget Model.

☝️ One more thing… In addition to forgiving debt, Biden announced more changes to the federal repayment system, like cutting monthly payment caps in half. The ongoing payment pause on most student loans has also been extended “one final time” through December 31, its seventh extension since the start of the pandemic.

🏛️ Pushback: Republican lawmakers and some centrist Democrats criticized Biden’s decision, saying Americans who already paid back their federal student loans, never took on debt in the first place, or didn’t attend college are being left out. And on the flip side, progressive Democrats and certain civil rights groups who've been pushing for $50,000 in debt cancellation say $10,000 isn't enough.

👀 Looking ahead… The Education Department will release more details on how borrowers can claim relief in the coming weeks. It also plans to make an application available before payments resume at the end of the year.

+Flash poll: Do you agree with Biden’s decision to cancel some federal student loan debt?

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