White House confirms no final decision yet on student loan forgiveness

President Joe Biden has not made a final decision on student loan cancellation, a White House spokesperson said on Friday after a news report said it was planning to cancel $10,000 in student debt per borrower.

The Washington Post report cited three people familiar with the plan. Two of them said the $10,000 debt forgiveness would apply to Americans who earned less than $150,000 in the previous year or less than $300,000 for married couples filing jointly.

White House spokesman Vedant Patel said the report was inaccurate.

“No decisions have been made yet. But as a reminder, no one has been required to pay a single dime of student loans since the president took office,” he told Reuters.

The current government pause in student interest and payments due to COVID-19 expires at the end of August.

The sources, who were not identified, told the newspaper that details could change.

According to a study by New York Federal Reserve economists, forgiving $10,000 per student would amount to $321 billion of federal student loans and eliminate the entire balance for 11.8 million borrowers, or 31 percent.

“Administration actions have already provided more than $18.5 billion in targeted debt relief to more than 750,000 borrowers. Not to mention tens of billions more saved by the 41 million borrowers who have benefited from the extended student loan payment pause,” Patel said.

Student debt cancellation has become a priority for many liberals and one that could shore up popularity with younger and more highly educated voters, who lean Democratic, before November’s midterm congressional elections.

But the Biden administration has been reluctant to unilaterally make an unprecedented cancellation of college debt owned by the U.S. government, a move that would test his legal authority.

Instead, Biden has asked Congress to pass a bill forgiving debt that he could sign.

The federal government has let 43 million borrowers stop paying on a total of $1.6 trillion in student loans since the onset of the COVID-19 pandemic in 2020.

“I am considering dealing with some debt reduction,” Biden told reporters on April 28. He said he was not considering the $50,000 debt reduction that some progressive Democrats have embraced.

(Reporting by Trevor Hunnicutt and Doina Chiacu; Editing by Hugh Lawson and Mark Porter)