The White House is expected to announce historic efforts to address student loan debt on Wednesday — both providing some level of loan forgiveness and extending the payment freeze that's been in place for more than two years.
The Biden administration has been working to finalize details, but the plan is expected to cover at minimum $10,000 in loan forgiveness for borrowers who make less than $125,000 annually. President Biden has faced pressure to go bigger with the package, though.
The $10,000 figure would be the largest forgiveness of federal student loans per individual to date.
The move comes just a week ahead of an Aug. 31 deadline, with millions of Americans waiting to find out whether their student loan payments will resume. Payments have been on hold since the start of the pandemic.
Since taking office, Biden has faced intense pressure from advocates to follow through on a campaign promise to address student debt.
But he walks a fine line, potentially alienating voters who don't have debt and possibly further driving up inflation.
The team at the Penn Wharton Budget Model has crunched the numbers and estimates that a plan forgiving federal college student loan debt would cost between $300 billion and $980 billion over 10 years, depending on the final details.
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