These student borrowers are excluded from Biden’s $10,000 debt forgiveness

Biden announced Wednesday that the administration would forgive $10,000 in student debt for borrowers earning less than $125,000 a year. The move fulfills a key campaign promise and comes after months of speculation about payments resuming without any permanent relief.

Yet the devil, as always, is in the details. The program misses millions of borrowers due to its strict criteria. Here are the biggest groups excluded from Biden’s loan forgiveness plan:

Individuals earning more than $125,000 annually Couples filing jointly and earning more than $250,000 annually Borrowers who took out student loans from private lenders Borrowers who took out student loans after June 30, 2022.

The income cap is small consolation to moderate Republicans and Democrats who have argued that an unlimited program would be too costly. Although the cap sits well above the incomes of low- and middle-income earners, it still leaves some graduates in a difficult situation. Many graduate programs that lead to higher-paying jobs come with large loan balances, and Biden’s plan offers little support for those students and graduates.

It also glosses over a small but important group of borrowers whose income may land well below the income cap. Private loans make up only about 8% of total student debt, according to data firm MeasureOne. Yet that still equates to roughly $131 billion in loans that won’t be affected at all by Biden’s agenda.

Higher education debt and debt held by students’ parents were omitted from the administration’s initial announcement, leaving an open question whether or not they were included in the relief package. Biden indicated Wednesday afternoon that the administration would soon share additional details about the pardon program.

The limitations have drawn criticism from progressive Democrats. Senator Bernie Sanders of Vermont had urged Biden to cancel all student debt. New York Rep. Alexandria Ocasio-Cortez pushed the administration to remove the earnings cap, arguing that it excludes many workers who should still see at least some of their debt forgiven.

Even without general relief, the department still plans to make monthly payments on income-based plans cheaper for all federally indebted borrowers, including graduate students.

“I don’t believe in a cut, especially for so many frontline workers who are drowning in debt and would likely be shut out of aid,” Ocasio-Cortez told The Washington Post in April.

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