The White House is expected to announce a plan to cancel a chunk of student loan debt on Wednesday, in addition to an extension of the existing payment pause, three sources with knowledge of the situation told The Hill.
Sources said President Biden’s intended measure will include at least $10,000 in loan forgiveness for borrowers who make less than $125,000 annually, as well as another payment freeze for roughly four months.
The $10,000 figure would be the largest forgiveness of federal student loans per individual to date.
The move comes just a week ahead of the White House’s self-imposed Aug. 31 deadline. The timing has left millions of Americans waiting for guidance from the Department of Education on whether student loan payments that have been deferred since the start of the pandemic would resume next month.
The potential announcement on Wednesday comes within the smallest window of time borrowers have had to determine when their payments would resume. The White House, under Biden and former President Trump, has 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. But that relief has only extended to certain cases, including for those who have attended schools found to have misled students, borrowers with disabilities and those participating in the Public Service Loan Forgiveness program.
But the $10,000 in forgiveness for a much wider breadth of borrowers will likely not satisfy some Democrats or activists who have pushed the Biden administration to forgive much more in federal student loan debt.
In May, Senate Majority Leader Charles Schumer (D-N.Y.), Sen. Elizabeth Warren (D-Mass.) and Sen. Raphael Warnock (D-Ga.) met with Biden to push for forgiveness. Advocates and other Democrats, including Schumer, have pressed for forgiveness of $50,000 per borrower or to cancel debt entirely.