Under the plan, which the president revealed on Twitter, borrowers earning less than $125,000 a year or couples earning less than $250,000 a year would be eligible for up to $10,000 in loan forgiveness. Recipients of Pell grants, given to students with the greatest financial need, will be eligible for another $10,000 in relief. Loan payments will also be limited to 5% of monthly income. The president is also deferring student loan repayments until the end of the year, and the Department of Education has said it will be the last time the pause is extended. Mr. Biden is scheduled to make remarks on Wednesday afternoon, the White House said. “True to my campaign promise, my administration is announcing a plan to give working and middle-class families some breathing room as they prepare to resume federal student loan payments in January 2023,” the president tweeted. The move to write off student debt follows months of internal deliberations over legality and costs. Mr. Biden made student loan forgiveness one of his top priorities during his campaign, and Democrats pressed the administration to follow through on his promise. Republicans have said Mr. Biden does not have the authority to cancel the debt and his plan is certain to face a barrage of legal challenges. An analysis by the Penn Wharton Budget Model concluded that forgiving $10,000 of student loan debt for those earning up to $125,000 a year would cost nearly $300 billion in the first year. It also found that more than two-thirds of the debt relief would go to Americans in the top 60 percent of incomes. Millions of borrowers are expected to be eligible for relief under the plan. While more than 43 million borrowers have federal student loan debt, according to Department of Education data, the Federal Reserve says the majority have less than $25,000 in debt and a quarter owe less than $10,000. Low-income Americans who never went to college and are struggling financially amid record inflation won’t benefit from any debt relief, critics of student debt relief point out. Writing off some of the student loan debt also wouldn’t address the rising cost of college, which has historically outpaced inflation in recent decades. Student loan repayment freezes began under the Trump administration at the start of the pandemic, and Mr. Biden has frozen student loan repayments a total of four times since taking office. The current moratorium ends after August 31, after which borrowers will have to start repaying their debt again unless there is another extension. Steven Portnoy and Kristin Brown contributed to this report.

Kathryn Watson

Kathryn Watson is a political reporter for CBS News Digital based in Washington, DC