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Biden leans toward $10,000 in student loan relief, advocates push back

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On April 27, 2022, activists held a rally for student loan forgiveness near the White House.

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Responding to the Biden administration’s announcement that it is considering forgiving 10,000 student loans, supporters expressed disappointment Friday.

Some Democrats have suggested that Joe Biden cancel the loans of at least $50,000 to reduce America’s student loan outstanding balance of $1.7 trillion. About 25% of borrowers in default or in delinquency are among the 40 million Americans who are currently in student loan debt.

Thomas Gokey co-founder of The Observer, said that “it’s an absolute insult.” Debt CollectiveA national alliance of creditors. “This is not what he said on the campaign.”

Biden promised $10,000 debt cancellation per borrower while running for the presidency. However, he had not said anything about restricting relief to individuals earning less than that amount. The Washington Post reports that the Obama administration may impose income caps on relief for $150,000 to individuals and $300,000. for married couples.

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Gokey explained that the addition of red tape will cause many people to miss out on the cancellation policy. She pointed to similar government forgiveness initiatives that have had problems. These include the public service loan forgiveness program and income driven repayment plans, which have so far largely failed to deliver their promised relief.

Gokey stated, “Everyone must jump through hoops.”

The Washington Post reported Friday that the Biden had cancelled the $10,000 plan. administration’s leading one to forgive student debt in the final days of May. According to the newspaper, three sources familiar with the discussion said that while the president had planned to announce it as soon as possible this weekend, the White House was forced to alter the time due to the massacre at Uvalde elementary school, Texas.

Although the current pause ends in August, it is not clear if the administration will need regular payments to start over.

CNBC reported that the White House had denied any plan to forgive student debt and did not make a final decision.

“No decisions have been made yet — but as a reminder no one has been required to pay a single dime of student loans since the President took office,” a White House spokesman told CNBC.

The cost of cancelling 10,000 per borrower is around $321 billionAround one-third (33%) of student loan borrowers will be able to forgive their loans completely.

While it’s unclear how the relief would be affected by income caps and the reductions, one analysis showed that the average was around 97%The lowest income students owed the most student loans

A cancellation of ten thousand dollars would be an insult to the face.

Derrick Johnson

President of the NAACP

However, student debt is still more than $30,000 and over 3,000,000 borrowers owe greater than $100,000.

Derrick Johnson, President of NAACP said that $10,000 would not do any good for the Black community.

Johnson stated that the average Black student borrower has nearly double the debt to student loans than their white counterparts.

He said, “Ten Thousand Dollars in cancellation would have been a rude shock to the face.” President Biden: It’s not whether you are capable of it, but whether or not it is something you will do.

— Additional reporting by CNBC’s Thomas Franck.

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