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


Student loan borrowers gather near the White House to demand that President Biden cancel student loans – all without a check on May 12, 2020 in Washington, DC.

Paul Morigi | beautiful pictures

Supporters expressed anger and frustration on Friday at news that the Biden administration was leaning toward forgiving the $10,000 student loan.

Some Democrats and activists have insisted that President Joe Biden needs to cancel at least $50,000 per borrower to make a meaningful impact on $1 worth of student loans. $7.7 trillion of the country. More than 40 million Americans have student debt, and about 25% of those borrowers are in delinquency or default.

“It’s an absolute insult,” said Thomas Gokey, co-founder of Collective debt, a national union of debtors. “This is less than what he promised during the campaign.”

While running for president, Biden vowed to immediately cancel $10,000 of each borrower’s debt, and he said nothing about limiting the relief to those earning below a certain amount. The administration is now considering imposing an income cap for $150,000 in relief for individuals and $300,000 for married couples, according to The Washington Post.

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Adding red tape to the cancellation program will result in more people missing out on the policy, Gokey said, pointing to other government forgiveness efforts that have been stymied by problems. These include public service debt forgiveness and income-based repayment plans, which have largely failed to deliver on the promised relief so far.

“Everybody’s going to have to jump through hoops,” says Gokey.

The Washington Post on Friday is consistent with earlier reports that the $10,000 cancellation plan is Biden Administration leads the way for student debt forgiveness in the last days of May. The newspaper, citing three people familiar with the discussions, said the president had hoped to make an announcement as early as this weekend but the mass shooting at an elementary school in Uvalde, Texas, forced The White House must change the time.

It is unclear whether the administration will require regular payments to begin again by the end of August, when the current pause is set to end.

The White House denied to CNBC that it had any plans to clear student debt and said it had not made a final decision.

A White House spokesman told CNBC: “No decision has been made yet – but to reiterate no one has been asked to pay a dime on student loans since the President took office.”

Canceling $10,000 for each borrower will cost about $321 billion and completely forgive the loans of about one-third of student borrowers.

It’s not clear how the bailout will shrink with the income cap, although one analysis found around 97% of all student debt held by employees below the proposed threshold.

Ten thousand dollars in cancellation would be a slap in the face.

Derrick Johnson

NAACP President

However, the average student loan balance is more than $30,000, and more than 3 million borrowers owe more than $100,000.

NAACP President Derrick Johnson said $10,000 “would do nothing” for the Black community.

“The average black borrower has $53,000 in student loan debt four years after graduation, almost twice as much as their white counterparts,” Johnson said.

“Ten thousand dollars in cancellation would be a slap in the face,” he said. “President Biden, it’s not whether you can do it or not; it’s whether you have the will to do it.”

– Additional reporting by CNBC’s Thomas Franck.



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