WASHINGTON — President Joe Biden announced Wednesday that he is canceling $10,000 in student debt for individuals earning less than $125,000 annually and extending a pause on loan repayments for all borrowers through the end of the year.
People who received Pell Grants to help cover the cost of college will be eligible for up to $20,000 in loan relief. And a new income-based repayment cap will ensure borrowers pay no more than 5% of their monthly income toward their undergraduate loans as long as they aren’t behind on payments. Some analysts believe that change may prove even more significant than the debt forgiveness.
Lamenting that “an entire generation is now saddled with unsustainable debt” because the cost of higher education has increased so much, Biden described his action as a matter of economic fairness that will “provide more breathing room for people” and boost America’s competitiveness.
