White House officials are planning to announce to President Biden Wednesday about his proposal to tackle student-loan debt, according to people familiar with the matter.
The president and his senior aides have been weighing for months whether to cancel some federal student loan debt. Mr. Biden’s top advisers have discussed a number of proposals, including eliminating $10,000 in federal student-loan debt for borrowers earning less than $125,000 per year, the people said. Advisers to the president have also discussed granting a pandemic pause on federal student-loan payments.
The details of the decision have been closely guarded by the White House. Only a small group of Mr Biden’s top aides have been informed of his plans, some said.
Mr Biden is scheduled to return to the White House on Wednesday from Delaware, where he is on vacation with his family. The president has said he will announce a decision on student loans by August 31.
The White House declined to comment or provide more details on the specific timing of the announcement. A spokesman reiterated that the president would make his decision before the end of the month.
A move to forgive $10,000 in student loans under certain income thresholds would fall short of Progressive Democratic demands for full student-loan cancellations or $50,000 per borrower, but it hits most of those 40 million people. May apply for those who have a total of $1.6. Trillion in student-loan debt.
Republicans have opposed broad student-loan forgiveness, saying such a move would be unfair to people who have already paid off their loans or never went to college, and could worsen inflation.
A report released on Tuesday from penn wharton budget model It is estimated that the one-time maximum loan forgiveness of $10,000 per borrower earning less than $125,000 per year would cost approximately $300 billion.
Last month, more than 100 Democratic senators and members of the House from across the party’s ideological spectrum asked Biden to extend the debt-payment pause beyond the end of August 31, citing continued economic difficulties. Mr Biden previously, most recently in April, cited similar reasoning for extending the pause.
Democratic members wrote, “Resuming student loan payments will force millions of borrowers to choose between paying off their federal student loans or having a roof over their heads, food on the table, or paying for childcare and health care.” “
Republicans opposed the continuation of the pause, arguing that it constituted “real loan forgiveness.” Senior House Republicans unveiled a bill this month that would end the pause, as well as overhaul other aspects of the federal student-loan portfolio. The bill is not expected to go anywhere, while Democrats control Congress and the White House.
The White House has left borrowers, loan servicing contractors and the Education Department in limbo as Mr Biden considers whether to extend the pause. Last month, the administration asked lenders to avoid sending billing notices or other communications related to resuming payments.
Loan servicers are contracted by the federal government to manage student loan payments. They communicate with borrowers how much they owe, where and how to send payments, and answer questions that borrowers have about repayment programs. Typically, they send billing notices at least 30 days before payments begin, so borrowers can plan ahead.
On Monday, a group of loan executives urged the administration to come to a decision, according to a letter seen by The Wall Street Journal, saying any move closer to the deadline could lead to “incidents of borrower miscommunication.” increased the chances.
“You should be aware that any announcement this late, less than ten days from the scheduled resumption of September 1, runs the risk of disruption of operations,” wrote Scott Buchanan, head of the Student Loan Servicing Alliance, an industry group.
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