President Biden Announces Student Loan Forgiveness Plan

Amanda Casanova | Contributor | Thursday, August 25, 2022
President Biden Announces Student Loan Forgiveness Plan

President Biden Announces Student Loan Forgiveness Plan

President Joe Biden’s administration has unveiled a plan that will forgive the student debt of people from middle-class and lower-income families.

The plan is part of Biden’s campaign promise to help Americans with debt accrued for receiving a college education.

According to a fact sheet released this week by the White House, the three-part plan would cancel $10,000 of student loan debt for people making less than $125,000 annually.

“Since 1980, the total cost of both four-year public and four-year private college has nearly tripled, even after accounting for inflation,” the document says. “Federal support has not kept up.

“Pell Grants once covered nearly 80 percent of the cost of a four-year public college degree for students from working families, but now only cover a third.”

According to the U.S. Department of Education, the average undergraduate student graduates with about $25,000 in student debt.

“The skyrocketing cumulative federal student loan debt– $1.6 trillion and rising for more than 45 million borrowers – is a significant burden on America’s middle class,” the White House said in its release.

The Christian Post reports that under the plan, the Education Department would provide up to $20,000 in debt cancellation to Pell Grant recipients and up to $10,000 in debt cancellation to non-Pell Grant recipients.

Individuals would qualify if they make less than $125,000 a year, and married couples would qualify if their combined income is less than $250,000.

Repayment on federal student loans is already paused through Dec. 31.

The plan also calls for a reduction in the monthly payments for undergraduate loans, a reform of the Public Service Loan Forgiveness program, and more accountability for colleges and universities that raise their tuition prices.

“This Administration has already taken key steps to strengthen accountability, including in areas where the previous Administration weakened rules,” the White House said in the fact sheet. “The Department of Education is announcing new efforts to ensure student borrowers get value for their college costs.”

Meanwhile, Republican National Committee Chairwoman Ronna McDaniel criticized the announcement, calling the plan “a bailout for the wealthy.”

“Biden’s bailout unfairly punishes Americans who saved for college or made a different career choice, and voters see right through this short-sighted, poorly veiled vote-buy,” she said.

Photo courtesy: ©Getty Images/Rick Loomis/Stringer 

Amanda Casanova is a writer living in Dallas, Texas. She has covered news for since 2014. She has also contributed to The Houston Chronicle, U.S. News and World Report and She blogs at The Migraine Runner.