In a White House briefing, President Biden confirmed plans to forgive some student debt. However, he said that this would not reach the level of $50,000 per borrower, which is what some Democrats have been campaigning for.
In the announcement, he said: “I am considering dealing with some debt reduction. I am not considering a $50,000 debt reduction. But I’m in the process of taking a hard look at whether or not there will be additional debt forgiveness.”
He said that the final answer to the student loan question will be coming in the “next couple of weeks”. But, when running for office, he vowed to write off up to $10,000 in student loan debt.
Will student loans be written off?
After reaching the White House, however, the president was warned by advisors that he could face legal challenges, especially if he takes student debt cancellation too far.
Going forward, he has asked his team to look for the best solution. But in the meantime, President Biden should be careful not to set any expectations for future student loan borrowers.
A report by the American Institute for Economic Research notes: “The students who follow in the years to come will borrow with the understanding that their $10,000 relief will be there as well. After all, it’s only fair. This situation highlights Planer’s Rule (Similar to Murphy’s Law): “An exception granted becomes a right expected the next time it is requested.”
Will there be another student loan extension?
Student debt is at an all-time high. Before the pandemic, it had reached $91.1 billion in annual federal student lending in 2019-20, up from $20.7 billion in 1990-91.
Last month, the president announced that the suspension of federal student loan payments will be extended until the end of August to give borrowers the chance to recover fully.
Now, some members of Congress are calling for an additional extension on this date. This is a key concern, especially for those on lower incomes struggling to pay back their debts.