Is Student Loan Forgiveness Happening? What We Know So Far

President Joe Biden has been facing pressure to cancel student loans, with some Democrats pushing him to wipe out at least $50,000 in student debt per borrower.

Biden said in April that he wouldn't consider canceling that much. He is now weighing forgiving $10,000 in student loan debt per borrower, with eligibility capped at $125,000 to $150,000 in annual income, in a bid to appeal to young voters ahead of the midterm elections, Bloomberg reported.

A Democrat close to the White House told the outlet that the president has come close to making a decision on the issue a number of times in recent months, but worries about inflation have caused him to take pause. A final decision hasn't been reached, according to the report.

As a presidential candidate, Biden pledged to "immediately cancel a minimum of $10,000 of student debt per person."

During an April news conference, he said he was "taking a hard look" at the issue and would have an answer "in the next couple of weeks."

In late May, The Washington Post reported that the Biden administration's tentative plan was to cancel $10,000 in student debt per borrower, but limit the relief based on income. According to that report, plans for an announcement were changed after a deadly massacre at an elementary school in Uvalde, Texas.

He may soon make an announcement on student debt cancellation—something young Americans overwhelmingly support—as he seeks to lift his job approval rating among a demographic that helped propel him to victory in 2020.

A recent Morning Consult poll found Biden's standing has declined the most among young voters during his presidency, with just 41 perfect of voters aged 18 to 34 approving of his job performance. A majority of voters said in the same poll that they don't think Biden is keeping the promises he made as a presidential candidate.

Meanwhile, sources told CNBC that it's possible the Biden administration could make an announcement on debt cancellation at the same time as it makes a decision on whether or not it will once again extend a pause on federal student loan payments—due to expire on August 31.

According to Bloomberg, the Biden administration is considering extending the pause until the end of the year or until next summer.

The Department of Education has told student loan servicing contractors to hold off on sending out payment reminders, the Wall Street Journal reported this week, setting off speculation that the Biden administration would extend the payment pause once again.

"The situation is that we're almost 30 days away from the planned resumption and the department has been telling servicers to hold off on resumption communications for the last few months," Scott Buchanan, the head of the Student Loan Servicing Alliance, told the newspaper.

'Kick the Can Down the Road'

"Maybe the department expects that the White House will yet again kick the can down the road."

A Department of Education spokesperson said: "We will communicate directly with borrowers about the end of the payment pause when a decision is made."

Former President Donald Trump's administration initially suspended federal student loan payments in March 2020 amid the pandemic. The freeze was extended multiple times by Trump and Biden.

In a statement announcing the extension to August 31, Biden said it would "enable Americans to continue to get back on their feet after two of the hardest years this nation has ever faced."

The White House and the Department of Education have been contacted for comment.