US President Joe Biden waives off student loans

By Our Special Correspondent

President Biden believes a post-high school education should be the ticket to middle-class life, but for many, the cost of taking out loans for college is a lifelong burden that deprives them of that opportunity. During the campaign, he promised to waive student loans.

Today, the Biden administration is following through on that promise and giving families breathing room as they prepare to begin repaying loans after the financial crisis brought on by the pandemic.

Since 1980, the total cost of four-year public and four-year private colleges has nearly tripled, even after accounting for inflation. Federal support hasn't kept up: Pell Grants once covered about 80 percent of the cost of a four-year public college degree for students from working families, but now only cover a third.

This leaves many students from low- and middle-income families with no choice but to take on debt if they want to get a degree. The typical undergraduate student with loans now graduates with nearly $25,000 in debt, according to a Department of Education analysis.

"Both of these targeted measures are for families who need it most," the president said in remarks from the White House on Wednesday afternoon.

This relief is limited to Americans earning less than $125,000 a year or $250,000 for married couples or heads of household. According to the Department of Education, relief is also limited to the borrower's outstanding eligible loan amount.

According to the president's tweet, the payment pause on most federal student loans will be extended "one last time" through December 31, 2022. In his remarks, Biden said 95% of borrowers would benefit from the plan, or about 43 million people. Of those, over 60% are Pell Grant recipients.

In all, about 45% of borrowers, or about 20 million, will have their debt completely eliminated, Biden said. "It's 20 million people who can start to get on with their lives," Biden said.

According to higher education expert Mark Kantrowitz, Biden's decision to move forward with the $10,000 student loan cancellation for borrowers earning less than $125,000 will cost the federal government about $244 billion. A $20,000 relief for Pell Grant recipients could add nearly $120 billion to government spending.

Those debates centered on student loan forgiveness hitting Americans' wallets with high inflation, student debt to be written off, and how the president would have the power to deplete people's savings without a legislative branch.