WASHINGTON, D.C. – The Biden Administration announced today that it will cancel $10,000 of student loan debt for borrowers who earn less than $125,000 as individual tax filers and $20,000 for Pell Grant recipients, providing billions in relief to the nation’s borrowers. The administration will also extend the federal student loan payment pause through December 31, 2022.
In response, Jaylon Herbin, outreach associate and policy manager for the Center for Responsible Lending (CRL), made the following statement:
We applaud President Biden for being the first sitting president to cancel any amount of student loan debt and for extending the payment pause once more as millions of graduates would have struggled to resume making repayments on their loans. We also commend the president for withstanding political pressure to abandon his campaign promise to cancel $10,000 per borrower.
Today’s move will bring wealth-building opportunities to struggling borrowers who have been crippled by student loan debt, especially low-wealth individuals, women and people of color — who were also disproportionately affected by the burdens of an unforgiving public health crisis.
Despite the historic nature of today’s announcement, borrowers still need substantial, broad-based cancellation that is automatic and free from a burdensome application process. Under the $10,000 plan, millions will see only a small decrease in their debt burden. Furthermore, the means-testing approach limits relief, adds unnecessary red tape to cancellation and places significant barriers in the way of relief for low-income borrowers who lack the means to navigate whatever process will be put into place to obtain forgiveness.
Research by CRL has found that $50,000 of across-the-board debt cancellation would eliminate the student debt of more than 70 percent of all Black and Latino borrowers. Moreover, it would bridge the racial wealth gap created by longstanding racially discriminatory policies and benefit graduates trying to start a business or buy a home.
We thank President Biden for this great first step and continue to urge him to consider substantial, broad-based cancellation. We also urge the Department of Education to accurately track qualifying payments to its income-driven repayment (IDR) and Public Service Loan Forgiveness (PSLF) programs and ensure fair and inclusive implementation of these programs to avoid depriving millions, especially borrowers of color, from receiving immediate cancellation.
CRL research published in early May finds that cancelling $10,000 of federal student loan debt is insufficient to provide adequate relief for struggling borrowers and communities of color.
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