President Joe Biden confirmed last week at the White House that he would decide on student loan forgiveness within weeks.
One of the larger proposals (aside from complete forgiveness of federal student loans, of course) proposed by lawmakers, including Senate Majority Leader Chuck Schumer (D-NY) and Sen. Elizabeth Warren, is to forgive $50,000 in student loan debt (D-MA).
When questioned about using executive authority to suspend student loan debt on Thursday, President Biden told reporters that he is not considering a debt reduction of $50,000.
According to the Federal Reserve's analysis, forgiving $10,000 per borrower would result in approximately 11.8 million borrowers - slightly more than 31% - having their entire balance erased. If the Biden administration follows through on this plan, it is estimated that $321 billion in federal student loans will be forgiven.
According to multiple reports, forgiving $10,000 per borrower could cost between $245 billion and $321 billion, but setting an income cap of $75,000, for example, could reduce the cost to $182 billion.
It's not surprising that Biden isn't considering $50,000 per borrower; during the campaign, Biden supported a much smaller plan of up to $10,000 in forgiveness per borrower.
According to a recent Federal Reserve analysis, forgiving up to $50,000 per borrower would cost more than $900 billion but would erase the entire balance for nearly 80% of borrowers.
The amount of student loan forgiveness you receive may be determined by your income. According to The Washington Post, relief could be limited to those earning less than $125,000 or $150,000 for single filers, or $250,000 or $300,000 for married couples filing jointly. '
While Biden has discussed having an income cap on student debt relief, White House Press Secretary Jen Psaki told reporters Monday that those details have yet to be finalized.
Forgiveness could also be limited to loans used for university study, excluding programs such as medicine and law that require additional education. When asked about Biden's concerns about providing relief to borrowers from schools such as Harvard and Yale, Psaki explained that the president wants to ensure that the relief is "targeted to those graduates who have the greatest needs."
There has been some confusion about Biden's authority to cancel student loans. House Speaker Nancy Pelosi even said he lacks legal authority, instead remarking that it "would be an act of Congress," whereas Senate Majority Leader Chuck Schumer has argued Biden could do it under the same legal provision Trump used to postpone payments and interest accrual at the start of the pandemic.