On Friday, advocates expressed anger and disappointment after learning that the Biden administration is leaning toward forgiveness of student loans.
Some Democrats and activists want President Joe Biden to cancel at least $50,000 per student loan to make a difference. More than 40 million Americans are in debt for their education, and 25% of them are in default.
Thomas Gokey, co- founder of the Debt Collective, said it was an insult.
While running for president, Biden promised to cancel debt for everyone, but he didn't say anything about limiting the relief to people who make less than a certain amount. According to The Washington Post, the administration is considering imposing income caps of $150,000 for individuals and $300,000 for married couples.
More from Personal Finance: Is college worth it if you take on too much student loan debt?
Adding red tape to the cancellation program will result in many people missing out on the policy, Gokey said, pointing to other government forgiveness efforts that have been plagued by problems. These include the public service, loan,forgiveness program, and income-driven repayment plans.
Gokey said everyone will have to jump through hoops.
The Washington Post reported on Friday that the $10,000 plan is the Biden administration's leading student debt cancellation plan. The mass shooting at an elementary school in Uvalde, Texas, forced the White House to change the timing of the announcement, according to three people familiar with the discussions.
It is not clear if the administration will require regular payments to restart at the end of August, when the current pause is set to end.
The White House denied to CNBC that it has a plan to forgive student debt.
A White House spokesman told CNBC that no one has been required to pay a single dime of student loans since the President took office.
It would cost $321 billion to cancel $10,000 of student loan borrowers' loans.
It's not clear how the relief would narrow with the income caps, and an analysis found that around 97% of all student debt was held by those making below the proposed thresholds.
Ten thousand dollars in cancellation would be a slap in the face.
More than 3 million borrowers owe more than $100,000, and the average student debt balance is over $30,000.
The NAACP President said that $10,000 won't do anything for the Black community.
The average Black student loan debt is nearly double that of their white counterparts, according to Johnson.
He said cancellation would be a slap in the face.
CNBC has additional reporting by Thomas Franck.
How would student loan forgiveness affect you? If you are willing to share your story for an upcoming article, please email me at annie.nova@nbcuni.com
All Rights Reserved © 2024
