August 31 is an important date for millions of Americans with federal student loans — it’s not just the day the pause on payments is set to expire, but also the deadline by which President Joe Biden will decide on broader federal student loan forgiveness.
That’s at least according to White House Press Secretary Karine Jean-Pierre, who told reporters on Tuesday that Biden’s decision would come before the end of the month.
“We’re just going to continue to assess our options for cancellations … so no decisions have been made on that [yet],” she said. “And the president has made clear it will — he’ll have something before August 31st.”
White House officials are zeroing in on canceling $10,000 for all borrowers who earn less than $150,000 per year, CNBC reports, but the administration has yet to confirm such plans.
A memo recently obtained by Politico, however, shows that officials in the Department of Education have a detailed plan to provide relief to millions of borrowers as soon as Biden gives them the green light.
Most borrowers, according to the documents, would need to apply for the program on StudentAid.gov by self-certifying that they qualify for relief, but several million borrowers for whom the department has income information available would receive debt relief automatically within several months.
An Education Department spokesperson told Politico that the agency’s “review of broad based debt cancellation remains ongoing and no decisions have been made” and that they would not comment on “any alleged internal documents or internal deliberations about hypothetical scenarios.”
More than 40 million Americans carry student loan debt. A wide-scale student loan cancellation of $10,000 per borrower would forgive a total of $321 billion of federal student loans and eliminate the entire balance for about 11.8 million borrowers, according to the Federal Reserve. The average borrower would receive $8,478 in student loan forgiveness.
The Department of Education’s pause on student loan repayment, interest and collections that was first enacted in March 2020 is set to expire on Aug. 31 — and while Jean-Pierre told reporters that “no decisions have been made” about the end of the pause, some experts say that the pandemic-era relief policy will be extended yet again, at least through the end of the year.
“The president understands how students could affect a family and … how the pressure of that can really be a lot and put a lot of weight on a family’s purse or economic situation,” Jean-Pierre said. “He is going to make his decision on this, and when he has something to say, we will share that.”
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