WASHINGTON — President Biden will announce a call on Wednesday about his plans for student loan debt relief, a highly anticipated moment that might affect about 45 million borrowers nationwide, based on people acquainted with the matter.
Although details of the plan were still being finalized, White House aides have said Mr. Biden was weighing a targeted plan that might provide $10,000 of debt relief for borrowers who make below a certain level of income.
Mr. Biden also is anticipated to increase a pause on loan payments for all borrowers, a Trump-era program that has been in effect for the reason that start of the pandemic.
Mr. Biden has faced calls to cancel student debt throughout his presidency, driven by borrowers and the progressive wing of his Democratic Party. He backed the thought on the campaign trail in 2020, saying: “I’m going to be sure that everyone on this generation gets $10,000 knocked off of their student debt as we attempt to get out of this godawful pandemic.”
But White House aides say the president has agonized over the choice, questioning whether cancellation should apply to students of each private and non-private universities and saying he doesn’t want the relief to use to those earning high incomes.
The Biden Presidency
With midterm elections looming, here’s where President Biden stands.
The choice will add fuel to debates raging in Washington — and inside the Democratic Party — about economic fairness and the potential to exacerbate an inflation rate that has reached a 40-year high.
Mr. Biden had promised a call by the top of the month, but he is anticipated to return to the White House on Wednesday from Delaware, where he’s on vacation along with his family.
“The President could have more to say on this before Aug. 31,” said Abdullah Hasan, a White House spokesman. “Nobody with a federally held loan has needed to pay a single dime in student loans since President Biden took office.”
Mr. Hasan also noted that the Biden administration has “already canceled about $32 billion in debt for greater than 1.6 million Americans,” a reference to actions to revive and expand targeted relief programs that had all but stopped functioning through the Trump administration.
The Biden administration has worn out debts for eligible public service staff, permanently disabled borrowers, defrauded students and folks whose schools abruptly closed while they were enrolled.
What we consider before using anonymous sources.
How do the sources know the data? What’s their motivation for telling us? Have they proved reliable prior to now? Can we corroborate the data? Even with these questions satisfied, The Times uses anonymous sources as a final resort. The reporter and at the least one editor know the identity of the source.
Mr. Biden’s decision is prone to draw criticism from the left and the correct. The quantity of debt cancellation Mr. Biden is considering doesn’t go nearly so far as many Democratic lawmakers and progressive groups, including racial justice advocates, have asked for. Senator Chuck Schumer of Latest York, the bulk leader, other influential Democrats and several other civil rights organizations have pushed Mr. Biden to forgive $50,000 per borrower.
White House officials have quietly been preparing for months for the likelihood that Mr. Biden would ultimately determine to pair targeted loan forgiveness with an eventual restart of payments.
Administration officials say that the mix of eventually restarting payments while forgiving debt for a targeted group is not going to add to rising prices and that the relief will aid lower-income borrowers who’re struggling to afford soaring food and rent.
But Republicans and a few Democratic economists say the policies will add to inflation by giving consumers more cash to spend.
Derrick Johnson, the president of the N.A.A.C.P., said on Tuesday that if Mr. Biden moves forward with the plan of providing just $10,000 of relief with income caps, “we’ve got an issue.”
“Tragically, we’ve experienced this so persistently before,” Mr. Johnson said in an announcement, noting the Senate’s failure to pass police reform. “President Biden’s decision on student debt cannot develop into the most recent example of a policy that has left Black people — especially Black women — behind.”
He said the potential plan was no method to treat “Black voters who turned out in record numbers to once more save democracy in 2020.”
Republicans have called any debt cancellation a handout to largely high-income college graduates. Some economists warn it could lead on colleges and universities to lift tuition prices, in anticipation of future loan relief.
Congressional offices, outside groups and even the businesses that service federal student loans have been left to guess at Mr. Biden’s eventual move.
“We haven’t heard in the event that they’re taking a look at forgiveness or a payment pause or each,” Scott Buchanan, the chief director for the Student Loan Servicing Alliance, a trade group, said on Monday. “I don’t know what the plan is, nor have servicers even been consulted about how they might do this and what’s possible to implement. That’s my deep fear — that they announce something here and it’s not doable.”
Erica L. Green contributed reporting.