Report: White House to announce cancellation of $10K in student debt for some borrowers

President Joe Biden is expected to announce his decision to forgive student loan debt as soon as Wednesday, Reuters is reporting.

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The current government pause in student interest and payments due to COVID-19 expires at the end of August.

A source with knowledge of the matter told CNN on Tuesday that Biden will likely announce that the government intends to forgive up to $10,000 in federal loan debt to individuals who make $125,000 or less a year.

It is also believed that Biden will announce whether he plans to extend the pause on student-debt repayments. Federal student loans are currently in COVID-related forbearance and payments have been paused until Aug. 31.

Borrowers are not required to make payments on their loans and interest rates have been set to 0%. The last time federal student loan payments were due was March 2020, the month the COVID-19 pandemic began.

Nearly 12 million borrowers (about one-third of federal loan borrowers) would have their entire balance eliminated if $10,000 is forgiven. It would cut total debt by at least half for another 20%, according to data from the Education Department.

Forgiving $10,000 per student would cost around $321 billion, government economists say.

Biden had been pressed to forgive up to $50,000 in federal student loan debt. He said he would not consider that amount.