The White House is considering a plan to forgive $10,000 in student debt for borrowers making less than $125,000, CNN reports. The Biden administration has promised to make a decision on student loan forgiveness by the end of August, when monthly loan payments are scheduled to resume after a hiatus of more than two years as part of a pandemic-era relief policy. It remains unclear how the administration will proceed, if at all, in canceling the loan. Extending the payment freeze is also on the table, and federal student loan servicers have been instructed to stop sending payment reminders to borrowers. Resuming payments without better preparing borrowers could cause delinquency rates to rise, experts warned. The nation’s outstanding student loan debt exceeds $1.7 trillion, with 40 million Americans in debt for their education. Before the pandemic, when the economy was in one of its healthiest periods, about 10 million borrowers were still late on their payments. On the campaign trail, President Joe Biden has backed behind $10,000 in student loan forgiveness, while his rivals on the left, Sen. Elizabeth Warren, D-Mass. and Sen. Bernie Sanders, I-Vt., vowed to cancel more . Warren pledged to write off $50,000 for most borrowers and Sanders to wipe out all the debt. The Washington Post also reported that the White House is leaning toward $10,000 in cancellations. Meanwhile, the administration has considered ways to limit relief to certain earners to quell criticism that student debt relief is a gift to wealthier Americans. More from Personal Finance: What a Recession Could Mean for You The Best Money Moves After Fed Rate Hikes Nearly Half of Americans Fall Deeper into Debt Biden is now under intense pressure to rescind more than $10,000, including from groups like the NAACP and lawmakers like Senate Majority Leader Chuck Schumer, D-N.Y. Wisdom Cole, national director of the NAACP’s youth and college division, recently said on Twitter that winning just $10,000 would be “a slap in the face.” At the same time, sweeping student loan forgiveness will likely anger some Americans, including those who never borrowed for their education or went to college. Several Republicans have said they will try to block the president’s effort to cancel the debt. Rep. Kevin Brady, R-Texas, the ranking member of the House Ways and Means Committee, recently called student loan forgiveness “a gift to highly educated college graduates.” Overall, however, a majority of voters (62%) support student loan forgiveness, according to a Morning Consult poll. White House officials did not immediately respond to a request for comment. This is a developing story. Check back for updates.
