President Joe Biden on Thursday offered an update on his administration’s next steps with student loans, a day after Senate Majority Leader Chuck Schumer, the New York Democrat, suggested the president was getting closer to cancelling up to $50,000 in student debt per borrower.
“I am not considering $50,000 debt reduction, but I’m in the process of taking a hard look at whether or not there will be additional debt forgiveness, and I’ll have an answer on that in the next couple of weeks,” Biden told reporters at the White House, as he responded to questions following a speech on additional aid for Ukraine.
Forgiving up to $50,000 in student debt per borrower would cost $904 billion and would forgive the full balance for 79% of the 37.9 million federal borrowers, according to recent estimates from the New York Federal Reserve.
Adding a household income limit of $75,000 would cut the total cost of a $50,000 forgiveness policy to $507 billion, and having that same income limit but forgiving a max of $10,000 per borrower would cost $182 billion.
The White House in mid-April had said it will extend its pause for student-loan repayments again before Aug. 31 — or finalize a plan by then on canceling student debt. Analysts have cast Biden’s moves with student loans as a midterm-elections gambit.
Biden on Thursday also played down a report showing a contraction in the U.S. gross domestic product, saying “no one is predicting a recession,” though “some are predicting there may be a recession in 2023.”