“In keeping with my campaign promise, my Administration is announcing a plan to give working and middle class families breathing room as they prepare to resume federal student loan payments in January 2023,” the president said in a Twitter post outlining some details of his plan.
Mr. Biden also said those with undergraduate loans would be able to cap their payments at 5 percent of their monthly income, a change that could significantly reduce bills for millions of borrowers. The government’s current income-driven plans generally cap payments at 10 percent of a borrower’s discretionary income.
The debt forgiveness, although far less than the amount that some Democrats had been pushing for, comes after months of deliberations in the White House over fairness and fears that it could exacerbate inflation before the midterm elections. The plan will almost certainly face legal challenges, making the timing of any relief uncertain.
Join the conversation as a VIP Member