FOR IMMEDIATE RELEASE
August 24, 2022
William Pierre-Louis, Jr.
President Biden’s Student Debt Cancellation Announcement is a Big Win for Borrowers, but Does Not Go Far Enough
President Biden’s decision to cancel student debt and extend the payment pause is welcome news to many borrowers, but the low amount of cancellation and the means-testing requirements leaves many still suffering under the crushing weight of student debt.
This broad-based cancellation will create some progress in closing the racial wealth gap, but higher levels of debt cancellation would do more to close it. Means-testing creates barriers that will prevent the borrowers who need it most from receiving the cancellation they are entitled to.
“The cancellation announced today represents a victory for borrowers and advocates across the country, but still leaves many people with unsustainable amounts of debt,” said Emily Hirtle, senior policy associate with AFR.
Today, President Biden announced that he will cancel $20,000 of federal student debt for Pell Grant recipients and $10,000 for other borrowers through executive action. This relief will be means-tested and capped at individuals making $125,000 annually or families making $250,000 annually. Additionally, the President announced that he will extend the payment pause on federal student loans until December 31, 2022.
The announcement comes after the tireless work of advocates, unions, veterans, teachers, students, and families and will provide relief to millions of borrowers across the country. This cancellation, in tandem with the extension of the payment pause, will make it easier for families to continue to recover from the pandemic.
“Advocates and borrowers alike are excited for this announcement. We applaud the President and his administration for their continued work on this issue and think this is one step of the many needed to help address the racial wealth gap affecting BIPOC communities,” said Elyse Hicks, consumer policy counsel with AFR.