White House says no decision has been made on student loan forgiveness

WASHINGTON (Reuters) – President Joe Biden’s administration has not made a final decision on whether to cancel the student loan, a White House spokesman said on Friday, after a news report said he planned to cancel $10,000 of student debt per borrower.

The Washington Post report cited three people familiar with the plan. Two said the $10,000 debt forgiveness would apply to Americans who earned less than $150,000 in the previous year, or less than $300,000 for married couples filing jointly.

White House spokesman Vedant Patel said the report was inaccurate.

“No decision has been made yet. But as a reminder, no one has been forced to pay a single penny of student loans since the president took office,” he told Reuters.

The current government pause in student interest and payments due to COVID-19 expires at the end of August.

The sources, who have not been identified, told the newspaper that details could change.

According to a study by economists at the New York Federal Reserve, forgiving $10,000 per student would represent $321 billion in federal student loans and eliminate the entire balance for 11.8 million borrowers, or 31%.

“The administration’s actions have already provided more than $18.5 billion in targeted debt relief to more than 750,000 borrowers. Not to mention the additional tens of billions saved by the 41 million borrowers who benefited of the extended suspension of student loan payments,” Patel said.

Canceling student debt has become a top priority for many liberals, and one that could boost popularity with younger, more educated voters, who lean towards the Democrats, ahead of November’s midterm legislative elections.

But the Biden administration has been reluctant to unilaterally proceed with an unprecedented write-off of college debt held by the U.S. government, a move that would test its legal authority.

Instead, Biden has asked Congress to pass a debt-cancelling bill he may sign.

The federal government has let 43 million borrowers stop paying on a total of $1.6 trillion in student loans since the COVID-19 pandemic began in 2020.

“I’m looking at facing debt reduction,” Biden told reporters on April 28. He said he wasn’t considering the $50,000 debt cut that some progressive Democrats have embraced.

(Reporting by Trevor Hunnicutt and Doina Chiacu; Editing by Hugh Lawson and Mark Porter)

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