President Joe Biden on Wednesday is set to announce his long-delayed move to forgive up to USD 10,000 in federal student loans for many Americans and extend a pause on payments to January, according to three people familiar with the plan. Biden has faced pressure from liberals to provide broader relief to hard-hit borrowers, and from moderates and Republicans questioning the fairness of any widespread forgiveness.

The delay in Biden’s decision has only heightened the anticipation for what his own aides acknowledge represents a political no-win situation. The people spoke on the condition of anonymity to discuss Biden’s intended announcement ahead of time.

President Biden’s intended measure will include at least USD 10,000 in loan forgiveness for borrowers who make less than USD 125,000 annually, The Hill reported.

As per the reports by The Hill, the White House under Biden and former President Trump, extended the pause six times since March 2020, sometimes giving borrowers up to a month’s notice on whether their bills would be due.

Trump’s order temporarily stopped the accrual of interest on federal student loans, effectively putting USD 1.6 trillion in debt owed by some 40 million Americans on hold. Since Biden has taken office, his administration has green-lighted over USD 31 billion in student loan relief for hundreds of thousands of borrowers. 

The POTUS Joe Biden has been under fire by the liberals for not providing relief to the borrowers hit hard by the pandemic and the consequent economic slump. On the other hand, the Republicans have questioned the fairness in the distribution of the waiver programme or other blanket forgiveness schemes.

Critics of the administration, including many Republican lawmakers, have said such a move is likely to add to inflation.

According to a study by New York Federal Reserve economists, forgiving $10,000 per student would amount to $321 billion of federal student loans and eliminate the entire balance for 11.8 million borrowers, or 31% of them.

Education Secretary Miguel Cardona said this week that a decision may come in the “next week or so.”

Student debt is most prevalent among Americans aged 25 to 34. Sixty-seven percent of student loan borrowers are under 40, according to the New York Federal Reserve.

The White House under Biden and former President Trump, extended the pause six times since March 2020, sometimes giving borrowers up to a month’s notice on whether their bills would be due.

Trump’s order temporarily stopped the accrual of interest on federal student loans, effectively putting $1.6 trillion in debt owed by some 40 million Americans on hold. Since Biden has taken office, his administration has greenlighted over $31 billion in student loan relief for hundreds of thousands of borrowers.

Earlier in April, the Biden administration issued a release announcing that it is taking steps to correct “historic failures” that have hamstrung some 46 million student loan borrowers in debt amounting to $1.75 trillion. 

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