Biden nears decision on student loan cancelation, moratorium extension

WASHINGTON — President Joe Biden is expected to announce as soon as Wednesday that he will cancel $10,000 of federal student loans per borrower making $125,000 a year or less.

He is also expected to extend the federal student loan payment pause for several more months, according to multiple sources familiar with the matter.

Although Biden had previously said he would make an announcement on student debt cancelation by the end of the month, the White House has insisted that no final decision had been made yet.

“The President will have more to say on this before August 31,” White House spokesman Abdullah Hasan said. “As a reminder, no one with a federally-held loan has had to pay a single dime in student loans since President Biden took office, and this Administration has already cancelled about $32 billion in debt for more than 1.6 million Americans — more than any Administration in history.”

It is not clear whether there will be additional criteria for qualifying for student loan forgiveness.

The expected announcement comes as Biden is facing criticism from student debt relief advocates over his drawn-out decision-making process that has left millions of borrowers unclear about whether they would have to start making payments when the moratorium expires at the end of August.

Although Biden is expected to follow through on his key campaign promise to address student debt, the move falls short of the $50,000 in cancelation that some Democrats have called for.

White House chief of staff Ron Klain on Friday spoke with Senate Majority Leader Chuck Schumer, D-N.Y., Sen. Elizabeth Warren, D-Mass., and Sen. Raphael Warnock, D-Ga., asking them to “do as much as they can” on this issue, according to a source familiar with the call. All three senators have been vocal supporters of widespread student debt cancelations.

Some debt relief advocates have also been pushing the White House not to means-test cancelation, arguing that qualifying criteria such as an income cap would make implementation difficult.

Roughly 45 million Americans have student debt. The Federal Reserve estimated that in the second quarter of 2022, Americans owed more than $1.7 trillion in student loans.