Only those earning less than $ 125,000 would be eligible to forgive their student loan, Forbes reported.
All federally guaranteed student loans have been forbidden throughout the pandemic, and Biden has extended the break in payments and interest until October 1.
Supporters of the loan cancellation plan say it would trigger a large chunk of the economy, including new businesses, consumer spending, retirement savings, home buying and others sectors. Critics, however, say the move would bring only a slight increase in economic activity to GDP. Republicans are said to have opposed this decision.
“This pandemic has made it nearly impossible to ignore the fact that we can and must take bold action to address inequalities and disparities in our country and bring much needed relief to our communities,” said Massachusetts Representative Ayanna Pressley.
Biden has previously said he supports the idea of forgiving $ 10,000 per borrower, but has also expressed reservations about doing so unilaterally through executive action, Forbes reported. The White House also reported that Congress should pass legislation to accomplish this, as student loan matters typically fall under federal spending set by Congress.
“The president continues to support the cancellation of student debt to bring relief to students and families,” tweeted White House press secretary Jen Psaki. “Our team is looking at if there are any steps he can take through executive action and he would be happy to be able to sign a bill sent to him by Congress.”
The Higher Education Act 1965 allows the United States Secretary of Education to cancel student loans, meaning Biden could order the move, according to Warren and Schumer’s disposition. However, such a one-sided move by Biden is unlikely given the stakes of the hundreds of billions of dollars that are expected to be wiped off the books at the same time for nearly 40 million people.
The resolution puts pressure on Biden to act faster on student loan debt – although the president sees this issue as one of his top priorities, Forbes reported.