By Sherri Kolade
How would you like to have $10,000 in student loan debt forgiven?
For a segment of Americans drowning under piles of bills and past-due notices, that’s not a bad deal and it could be in the works soon as President Joe Biden is developing plans to cancel $10,000 worth of student loan debt for borrowers making $10,000 a year or less.
NBC News reported that by Wednesday, August 22, he might decide to cancel $10,000 of federal student loans (per borrower) who meets those requirements.
The article added that Biden might also extend the federal student loan payment pause for a few more months, according experts close to the matter.
“The President will have more to say on this before August 31,” White House spokesman Abdullah Hasan said in the article. “As a reminder, no one with a federally-held loan has had to pay a single dime in student loans since President Biden took office, and this Administration has already cancelled about $32 billion in debt for more than 1.6 million Americans — more than any Administration in history.”
It is uncertain if more information will be available on other student loan forgiveness qualifications, according to the article.
The expected announcement comes as Biden is facing criticism from student debt relief advocates over his drawn-out decision-making
About 45 million Americans have student debt, according to the article and the Federal Reserve forecasts that in the second quarter of 2022, Americans have more than $1.7 trillion in student loans.
Further, the data shows that debt distribution is more massive among borrowers of color, particularly Black students.
Nearly nine in 10 Black students take out federal student loans to pay for college, compared with seven in 10 white students.
African American students are far more likely to have large student debt than their white, Hispanic or Asian classmates, with 59.5 percent of African American students borrowing more than $29,500.
Black borrowers are more than twice as likely as white borrowers to default on their student loans, which he said is a by-product of a U.S. median household income that’s about $25,000 less for Black families than whites.
“People having to make choices between paying their student loan and paying the rent … debt relief should be done immediately,” Biden stated previously.
Michigan Attorney General Dana Nessel joined a multistate coalition of eight attorneys general earlier this year in urging Biden to fully cancel federal student debt owed by every federal student loan borrower in the country.
In a letter to President Biden, Nessel and the coalition stress that immediate relief is needed for borrowers struggling with the unmanageable burden of student loan debt. The attorneys general acknowledge the administration’s commitment to addressing the issue, however, the coalition urges President Biden to immediately exercise his authority under the Higher Education Act to cancel all federal student loan debt for every borrower.
“Hardships created by the pandemic – and the subsequent hold on loan payments – prove we are equipped to cancel student debt once and for all,” Nessel said. “I stand with my colleagues in asking President Biden to bring this much-needed relief to millions of borrowers across the country.”
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