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Biden will forgive up to $20K in student loans. What to know about his plan, Pell grants and more

September 28, 2022

Canceling $10,000 could benefit borrowers for multiple reasons such as: giving breathing room to borrowers, wiping out debt for borrowers who owe $10,000 or less, and can even contribute to narrowing the racial wealth gap for Black borrowers.

The cancellation will also improve financial security for borrowers by helping families pay down their debt or even set funds aside for retirement, according to the Center for American Progress, a progressive policy institute.

It would have minor impact on inflation, the institute claims, and would be further outweighed when the payment moratorium is eventually lifted.

U.S. Treasury Secretary Janet Yellen has said in testimony that loan forgiveness is a burden on low-income borrowers and would be beneficial to those who are looking to start businesses.

Nearly 100 lawmakers wrote to Biden in April urging the president to cancel student debt. Houston's Sylvia Garcia was among the members of Congress to sign the letter.

Issues:Educación