WASHINGTON — President Joe Biden plans to forgive up to $10,000 in student loan debt per borrower using executive action, according to Bloomberg.com.
The move could provide an instant boost to spending for Americans who have struggled with student debt for decades. However, there may be limitations to how the program is deployed.
According to the Washington Postthe White House will consider “income caps for eligibility for student loan relief that would exclude the highest earning Americans,” also known as means testing.
The Post said the threshold for an individual would be set at $125,000 or $150,000 from the previous year’s taxes. For couples, the Post reported, the threshold would be set at $250,000 to $300,000 if they filed taxes jointly.
Activists had asked for more than $50,000 in student loan debt forgiveness, but President Biden balked at that high figure.
Biden said he would decide what to do “in the next few weeks.”
The stakes for Biden and Democratic leaders will be high as some economists have said the move will exacerbate inflation. However, it could give Democrats a boost among young voters as they seek to retain power in Washington in the midterm elections later this year.