Only those earning less than $125,000 would be eligible for student loan forgiveness, Forbes reported.
All federally backed student loans have been in forbearance throughout the pandemic, and Biden extended the pause in payments and interest until Oct. 1.
Supporters of the loan cancellation plan say it would spark a wide swath of the economy, including new business, consumer spending, retirement savings, homebuying and other sectors. Critics, however, say the move would only bring a modest bump to economic activity in GDP. Republicans reportedly oppose the move.
“This pandemic has made it all but impossible to ignore the fact that we can and we must take bold action to address the inequities and disparities in our country and provide much-needed relief to our communities,” Massachusetts Rep. Ayanna Pressley said.
Biden previously said he supports the idea of forgiving $10,000 per borrower but also has expressed reservations about doing it unilaterally through executive action, Forbes reported. The White House has also signaled that Congress should pass legislation to achieve it as student loan matters typically fall under federal spending set by Congress.
“The President continues to support the cancelling of student debt to bring relief to students and families,” White House press secretary Jen Psaki tweeted. “Our team is reviewing whether there are any steps he can take through executive action and he would welcome the opportunity to sign a bill sent to him by Congress.”
The Higher Education Act of 1965 authorizes the U.S. secretary of education to cancel student loans, meaning Biden could order the move, according to Warren and Schumer’s provision. However, such a unilateral move by Biden is not likely considering the stakes of hundreds of billions of dollars that would need to be wiped off the books all at once for nearly 40 million people.
The resolution puts pressure on Biden to move faster on student loan debt — although the president does consider the issue one of his top priorities, Forbes reported.