For Millions, Biden's Student Loan Forgiveness Plan Will Reduce Up to $20,000 in Debt

Tens of millions of Americans will have up to $20,000 in federal student loan debt forgiven by President Biden.

The president said Wednesday that he will forgive $10,000 in federal student loan debt for borrowers earning less than $125,000 annually or couples earning less than $250,000 annually. This decision follows more than a year of internal deliberation.

Additionally, according to Mr. Biden, people who get federal Pell Grants and earn less than $125,000 annually are qualified for a total $20,000 forgiveness.

At the White House, Mr. Biden stated that "an entire generation is now saddled with unsustainable debt" and added that he wouldn't apologize for what he called a program to benefit the middle class.

I realize that not everything of what I'm announcing today will please everyone, he said. But I think my strategy is just and responsible.

According to unofficial estimates, the plan will cost more than $300 billion over a ten-year period. Although there is no immediate expenditure of federal cash, the action will eventually increase the deficit because borrowers will repay less or none of their loans to the federal government.

According to White House officials, the forgiveness is available to students with federal loans from undergraduate and graduate schools as well as Parent Plus loans. 

The canceled student debt will be excluded, similar to certain other federal student debt forgiveness schemes, even though debt cancellation is sometimes classified as income for tax reasons.

Borrowers who took out federal loans by June 30 of this year are eligible for forgiveness, according to the White House