WASHINGTON — The two-and-a-half-year pause on federal student loan payments is set to expire in about a week. On September 1, millions of Americans will need to resume paying off that debt, unless the Biden Administration extends the pause.
Some people online are suggesting a decision about an extension that could coincide with an announcement on student loan cancellation.
VERIFY looked into how many people would be affected by these announcements.
Our researchers spoke with Mark Kantrowitz, a student financial aid expert, who has written seven books on the topic, and read through Congressional Research Service reports.
As of March 31, about 45 million people owed a total of more than $1.6 trillion in federal student loan debt, according to a CRS report.
In terms of age, 16% of borrowers were 24 years old or younger, 64% were 25-49 years old and 20% were 50 or older.
As for how much money people owe, 15 million people owe $10,000 or less in federal student loans. Another 21 million people owe $10,001-$50,000 dollars, and about 9 million people owe more than $50,000.
President Biden has previously floated the idea of canceling up to $10,000 in federal student debt. If that were to happen—assuming there was no income cap—that would totally eliminate student loan debt for 15 million people, one-third of all borrowers.
Our researchers drilled into those numbers further, using Department of Education data.
With no income cap, canceling up to $10,000 of student loans would completely eliminate debt for 294,000 Virginians, 230,100 Marylanders and 28,900 people living in D.C.
As for what that would cost the government, Kantrowitz says it could be in the billions.
“So if everybody gets up to $10,000 of loan forgiveness, it would cost more than $375 billion," he said. "If only people who owe $10,000 or less have their loans forgiven, it will cost $75 billion.”
Some Democratic lawmakers have pushed for the Biden Administration to cancel up to $50,000.
“If you were to forgive $50,000 of debt per borrower, that would cost over a trillion dollars.”
There are various reports the President could make an announcement on this as early as Wednesday.