Biden Considering a $125,000 Income Cap for Student Loan Forgiveness

$10,000 in student debt relief may be on the table. Biden is expected to make a decision in the next few weeks.

Alix Langone Former Reporter
Alix is a former CNET Money staff writer. She also previously reported on retirement and investing for Money.com and was a staff writer at Time magazine. Her work has also appeared in various publications, such as Fortune, InStyle and Travel + Leisure, and she worked in social media and digital production at NBC Nightly News with Lester Holt and NY1. She graduated from the Craig Newmark Graduate School of Journalism at CUNY and Villanova University. When not checking Twitter, Alix likes to hike, play tennis and watch her neighbors' dogs. Now based in Los Angeles, Alix doesn't miss the New York City subway one bit.
Alix Langone
3 min read
Joe Biden

The president is exploring options to bring more relief to people with student loans, said White House Press Secretary Jen Psaki.

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The Biden administration is mulling over an income limit of $125,000 in order for borrowers to qualify for student loan forgiveness, Press Secretary Jen Psaki told reporters Tuesday, according to a Bloomberg report.

President Joe Biden indicated in remarks to reporters during a Thursday press briefing that his administration will soon make a decision on student loan forgiveness -- but borrowers shouldn't expect to receive $50,000 in forgiveness, though the administration may decide to move forward with $10,000 per borrower in loan relief

"I am considering dealing with some debt reduction," said Biden. "I am not considering $50,000 debt reduction, but I'm in the process of taking a hard look at whether or not there will be additional debt forgiveness, and I'll have an answer on that in the next couple of weeks."

The president's comments come on the heels of a Monday meeting with the Congressional Hispanic Caucus in which he indicated that he would soon make a decision regarding student loans, according to a report from The Washington Post

White House Press Secretary Jen Psaki confirmed the president's comments in a briefing Tuesday, stating that he "is looking at other executive authority options he has to bring relief to people who have student loans" and will make a decision before the current pause on loans ends Aug. 31.

During Monday's meeting, the president was asked by Rep. Tony Cárdenas to extend the current moratorium on loan payments, as well as cancel $10,000 worth of student loans per person via executive order, the report says. He was "incredibly positive" to the suggestions, Rep. Cardenas told the Post. When pressed by other lawmakers, Biden also implied that he wanted to take action sooner rather than later to cancel some student loan debt, the Post reported. The president confirmed that sentiment to reporters Thursday, although he said he wasn't currently considering a relief amount of $50,000 per borrower. 

There is a total of $1.75 trillion in outstanding student loan debt in the US, a number that has more than tripled in the last 15 years. The extension announced in April is the sixth time the moratorium on payments has been extended since the beginning of the COVID-19 pandemic, the last three of them ordered by the Biden administration. 

The expanded moratorium on loan payments is helping 41 million Americans save a collective $5 billion, according to the Department of Education. Over the past year, the Biden administration has taken other actions to help borrowers, such as amending the Public Service Loan Forgiveness program to correct "historic failures" experienced by some borrowers, many of whom should have had their loans forgiven already but in many cases never received any debt relief. 

Monday's meeting with Democratic lawmakers signaled that the president is ready to head down a path to further student loan forgiveness, telling those present at the meeting they would be "very happy" with what he planned to do next, according to the Post. 

The White House didn't immediately respond to a request for comment.