Biden Plans to Act Immediately on Student Debt Relief

"We can and must move quickly," Kamin said, referring to a list of economic relief initiatives the incoming administration is planning, including $2,000 payments per person, an increase in the minimum wage to $15 an hour and acceleration of small-business loan distribution.

Biden's $10,000 loan forgiveness proposal would cost the government an estimated $377 billion if those owing less than $10,000 were included and received the amount that they owed, Student loan expert Mark Kantrowitz tells ThinkAdvisor.

He noted that passage won't be easy. Republicans could filibuster such a proposal and, if it were included as part of budget reconciliation bill requiring only a majority vote, other budget cuts would be needed to make it revenue neutral. The Heroes Act, which passed a Democratic House in May, only forgave those borrowers who owed $10,000 or less, which  would cut the cost to about $75 billion, Kantrowitz said.

He added that congressional approval would also be needed for Biden's public service loan forgiveness plan, which would change the plan from one forgiving debt after borrowers had made 120 qualifying payments to one where they would receive $10,000 forgiveness per year for a maximum of five years up front. Only 3% of borrowers have qualified for the current loan forgiveness plan.

Biden has proposed changes to the Department of Education's income-driven repayment plans for federal student loans that would cut the monthly payment from 10% to 5% of a borrower's discretionary income if their income topped $25,000 (it would be zero for those who earned less) for 20 years. After that, the loan would be forgiven tax-free. 

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• How Relief Package Affects College Aid, Loan Payments