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President Joe Biden announced that the United States will cancel $10,000 in student loan debt for individuals who are earning less than $125,000 a year and households with less than $250,000 in yearly income. The government will also extend a pause on payments until December 31.
"In keeping with my campaign promise, my Administration is announcing a plan to give working and middle class families breathing room as they prepare to resume federal student loan payments in January 2023," Biden tweeted ahead of a formal announcement on Wednesday (August 23) afternoon.
The plan will also forgive an additional $10,000 for students who received Pell grants to attend college.
The White House said that 90% of those who will benefit earn less than $75,000 a year.
According to USA Today, the plan would eliminate $321 billion in student loan debt for about 12 million people.
"All this means people can finally crawl out from under that mountain of debt to get on top of their rent and their utilities. To finally think about buying a home or starting a family or starting a business," Biden said in remarks from the White House.
The White Hosue has previously forgiven $32 billion in student loan debt for 1.6 million borrowers, including $10 billion for people who work in the public sector. The administration also canceled the student loan debt accrued by people who attended predatory colleges and expanded eligibility requirements for debt relief programs.