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President Joe Biden Announces Student Debt Forgiveness of $10K and Another Extension

President Joe Biden Announces Student Debt Forgiveness of $10K and Another Extension

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Aug. 24 2022, Published 12:18 p.m. ET

President Joe Biden and his administration came through on a campaign promise this week as he announced Wednesday that the government was forgiving $10K in student debt for around 43 million Americans.

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While offering a financial windfall for around 1/7th of the country's population seems like a positive thing, it has been met with criticism from multiple directions - including those who believe it's too much, and those who think it's not enough.

Biden Announces Forgiveness Plans for Student Loan Debt

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There's good news for student loan recipients: the federal government will now forgive $10K worth of student loan debt. And for those who received Pell Grants, they will receive $20K in forgiveness.

In addition, Biden announced that they are extending the federal loan repayment pause until January, as it was set to expire next month.

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Biden lined out his plans in a tweet and is expected to expand on details after 2PM EST today. Biden wrote on Twitter, "In keeping with my campaign promise, my Administration is announcing a plan to give working and middle class families breathing room as they prepare to resume federal student loan payments in January 2023.

I'll have more details this afternoon."

An infographic added that the forgiveness only applies to those making less than $125K a year, a sticking point which many progressives have decried as a distressingly low income threshold considering the cost of living and value of income that varies from region to region.

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In addition, the infographic informed that this will be the final loan repayment pause and will expire at the end of the year, giving people time to plan for the payments to resume next year.

The Debate Between Forgiveness and Those Who Are Beyond It

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Of course, not everyone is happy with the announcement that many borrowers will experience will relief.

Many Americans have already paid off their student debt and are asking - "what about us?"

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It's an age-old debate that strikes to the heart of a difference between older generations and younger generations. Many feel as though they paid their debt (literally, in this case) and received no aid or forgiveness. So by extending forgiveness to others, it's giving them an unfair advantage and slapping those who are "responsible" and paid their debts in the face.

However, it's impossible to ignore the current state of the economy which makes it more difficult for students today to pay back their debt and get a fair start at life. While it's true that many older Millennials and Generation X (ages 35-55) went through difficult financial times with no forgiveness programs or interest freezes, the unfortunate reality is that there's no way to go back in time.

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Rather than focusing on what isn't fair for those who have already completed their debt obligations, experts urge others to consider what this means for the future; people won't be trapped in the same unwinnable cycle their older siblings or parents were. While it doesn't ease the pain of those who scraped and suffered to pay back student loans before, it does provide some hope that tomorrow's work force won't be as tied down by debt.

Unfortunately, many still believe that $10K falls short of any meaningful forgiveness, and that it won't do enough - but it's a start.

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