The president will also extend a moratorium on payments for federal student loans until December 31.
As part of their Wednesday announcement of student debt forgiveness, White House officials plan to forgive up to $20,000 in student debt for Pell Grant recipients, according to four people with knowledge of the situation.
In addition to the anticipated cancellation of up to $10,000 in student debt for the majority of other borrowers, Pell recipients would also be eligible for additional debt forgiveness. According to the people familiar, the White House’s plans are only anticipated to affect Americans making less than $125,000 annually, or $250,000 for married couples filing jointly.
According to internal documents provided to The Washington Post, about 43 million federal student loan borrowers would be qualified for some kind of forgiveness, with 20 million possibly being able to have all of their debt forgiven. According to the White House, those making less than $75,000 will receive 90 percent of the aid.
A pause on federal student loan payments for the pandemic era, first put in place under the Trump administration, is also anticipated to be extended by the president. The people said that the moratorium will now be extended until December 31, which is after the midterm elections.
The individuals warned that the specifics could change and spoke on the condition of anonymity to reflect private White House conversations. President Biden will make the announcement today after returning to Washington.
The declaration would put an end to months of debate over whether Biden would exercise his executive authority to forgive some of the burden of federal student debt. It comes in advance of the congressional midterm elections and might help the Democrats with some voters, but it could also endanger their standing with those who believe the amount is insufficient or excessive.
Biden has angered activists and some borrowers of student loans who were sick of hearing promises of a decision that would take more than a year to come about. When it came to forgiving debt for those who attended prestigious universities, Biden previously expressed reluctance, and moderate Democrats and Republicans mocked the idea as fiscally irresponsible.
The decision to add additional forgiveness for Pell Grant recipients reflects the White House’s desire to limit debt relief to Americans most in need. Seven in 10 college graduates with federal loans also received a Pell Grant, and Pell recipients have on average an additional $4,500 more debt than other college graduates, according to the Institute for College Access & Success, an advocacy organization.
“It’s great to see the president take action to forgive the crushing debt burdens of borrowers from the most disadvantaged backgrounds,” said Lindsay Owens, executive director of the Groundwork Collaborative, a left-leaning think-tank.