For millions of borrowers, Biden claims he will forgive a $10,000 student loan debt.

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President Joe Biden announced on Wednesday that he will cancel $10,000 in student loans for the millions of students who qualify.

Biden also stated that he would erase up to $20,000 in loans for Americans that borrowed through the Pell Grant programme for low-income students in a tweet outlining his proposals.

The federal loan payment suspension, in effect from March 2020 and scheduled to expire on August 31 as part of the long-awaited change, is projected to be extended until January.

43M Americans have student loan debt totaling $1.6 trillion. It is anticipated that Biden's decision will have a $125,000 income restriction.

How many Americans are in debt due to student loans?

The president's procrastination had irritated proponents of extensive debt relief, and some of them had begun to wonder whether debt reduction would actually happen.

The president's procrastination had irritated proponents of extensive debt relief, and some of them had begun to wonder whether debt reduction would actually happen.

An unprecedented move

But for more than two and a half years, there hasn't been much precedent in the world of student loans.

Then-President Donald Trump froze student loan payments at the start of the coronavirus outbreak, put interest rates at 0%, and stopped debt collection efforts.

The moratorium was repeatedly extended by both Trump and Biden. The most recent extension was granted on April 6, which was less than 30 days before to the May payment start date.

It was set to expire Aug. 31, with some borrowers getting notices that were later retracted about payments resuming Sep. 1.

What will it cost to forgive student loans?

How far the proposal will go and how much it will cost are unclear. According to one research, forgiving $10000 to each borrower would eliminate $321 billion

Another this week found that forgiving federal college student loan debt will cost between $300 billion and $980 billion over 10 years, depending on exactly how the program is rolled out.