According to reports, President Biden reportedly plans to announce a long-awaited plan to forgive up to $10,000 in student loans and extend the COVID pause in repayments one more time on Wednesday.
The plan will benefit most borrowers making less than $125,000 a year.
Biden’s decision is designed to help young borrowers and give Biden’s Democratic allies a crucial boost ahead of the fall midterm elections.
Economic experts said that student loans are a hot-button issue, with more than 40 million Americans carrying a combined debt burden totaling over $1.6 trillion.
The experts said that repaying student loans could become even more challenging for borrowers across the nation with a deteriorating economy, rising inflation, climbing interest rates, and a cooling job market.
The looming decision comes as Biden celebrates the surprise passage of the so-called Inflation Reduction Act, which spends billions on climate change and allows the government-run Medicare program to negotiate lower prescription drug prices for seniors.
Moreover, it was learned that Biden hopes to balance the demands of progressives and racial justice advocates for total or much more extensive student loan forgiveness against the concerns of moderates about the economic implications.
Most Democrats, including Majority Leader Sen. Chuck Schumer (D-N.Y.), argued for writing off much more student debt, arguing that the $1.7 trillion in U.S. student loan debt held by about 45 million Americans is a significant drag on the economy.
The Democrats pushed for slashing as much as $50,000 per borrower.