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Biden Weighing Student-Loan Forgiveness for Those Making Under $125K: Psaki

  • Jen Psaki confirmed Biden is considering student-loan forgiveness for those making under $125,000 a year.
  • The Washington Post previously reported Biden was considering that income threshold.
  • Many Democrats are against the idea of targeted relief, wanting debt forgiven for all borrowers.

The White House confirmed reports that President Joe Biden is considering linking student-loan forgiveness to income.

“The president talked back on the campaign trail about taking steps or looking at steps to help people making less than $125,000 a year, so that is the frame through which he is making considerations at this point,” Press Secretary Jen Psaki told reporters on Tuesday.

This confirms reporting over the weekend from The Washington Post, which stated Biden is looking at capping the relief to student-loan borrowers earning less than $125,000 to $150,000, or $250,000 to $300,000 for couples that file joint taxes.

Biden said during a speech last week that a decision on student-loan forgiveness will be made “in a couple of weeks,” and while he said he is not considering $50,000 in relief for every federal borrower — an amount many progressive lawmakers have pushed for — he could likely fulfill his $10,000 forgiveness campaign pledge. But subjecting the relief to income thresholds is something some Democrats would rather not see happen.

New York Rep. Alexandria Ocasio-Cortez told The Washington Post she has concerns with income caps.

“I don’t believe in a cutoff, especially for so many of the front-line workers who are drowning in debt and would likely be excluded from relief,” Ocasio-Cortez said. “Canceling $50,000 in debt is where you really make a dent in inequality and the racial wealth gap. $10,000 isn’t.”

This differs from many Republican lawmakers’ views. Not only do most of them not want to see any broad relief; they want to ensure it doesn’t go to the highest earners. GOP Sen. Susan Collins previously told Insider loan forgiveness is “not fair” to those who repaid their debt over many years.

But Democrats are maintaining pressure on Biden to deliver broad and substantial relief to all federal borrowers. According to new data provided to Insider by Massachusetts Sen. Elizabeth Warren, canceling $50,000 in student debt would completely wipe out student-loan balances for 76% of borrowers.

“As this analysis clearly shows, cancelling student debt is a matter of racial justice and about providing relief to millions of hard-working people who invested in their education but are now drowning in debt,” Warren said in a statement. “The more President Biden cancels, the more we narrow the racial wealth gap among borrowers and the bigger the boost to Americans’ economic futures. This is the right thing to do.”

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