- Biden is expected to announce broad student-loan forgiveness on Wednesday, per Washington Post and Bloomberg.
- It would come exactly a week before payments are set to resume.
The fate of millions of student-loan borrowers could change in just one day.
President Joe Biden is expected to announce broad student-loan forgiveness on Wednesday, sources familiar have confirmed to The Washington Post and Bloomberg. He is reportedly considering canceling $10,000 in student debt for borrowers making under $125,000 a year, and the Post reported it would likely only apply to undergraduate debt, leaving out parents with debt for their children and people with debt from graduate school.
This would also come exactly one week before student-loan payments are set to resume. In April, Biden extended the pause on student-loan payments for his fourth time, through August 31, and Education Secretary Miguel Cardona said on Sunday that borrowers should know "within the next week or so" whether another extension is coming.
As Insider previously reported, though, this is the closest borrowers have ever been to resuming payments without an update from Biden. Advocates and student-loan companies alike have sounded the alarm on the lack of notice from the department and the issues it might bring when implementing any form of broad relief.
Scott Buchanan, executive director of the Student Loan Servicing Alliance — a group that represents federal loan servicers — wrote a letter to Cardona on Tuesday saying that "we are hearing from borrowers who are experiencing distress and deep concern about what they need to do or not do and that call volume has increased, which is being caused by this lack of clarity created by the government that we hope can be resolved."
Issues with the payment restart have already surfaced — Insider reported that student-loan company Maximus has mistakenly told borrowers payments are due as soon as September 1, despite guidance from the Education Department to halt any messaging of that nature.
While Democrats are using the final hours before an announcement to urge Biden to go bigger than $10,000 in relief, Republicans are using the time to do the opposite. GOP Sen. Tom Cotton, for example, wrote on Twitter on Tuesday that canceling student debt would be "a disastrous policy."
"It's a certainty that right now, colleges are raising tuition and telling students, 'take out even more debt—the government won't make you pay it back,'" he wrote.
To be sure, Biden has not confirmed any decision on relief and the reported plans could change before he makes an announcement. It's not final until it's final, but borrowers may finally receive news they've been waiting for since Biden took office.