Who May Be Excluded From President Biden's Student Loan Cancellation Plan

President Joe Biden might limit student loan debt relief to borrowers making $125,000 or less, White House press secretary Jen Psaki confirmed on Tuesday.

While Biden has not announced a final decision, Psaki floated the $125,000 cutoff proposal to reporters while accompanying Biden in Alabama on Tuesday, Bloomberg reported. The plan would offer relief to millions of student loan borrowers, easing what many have said is a significant financial burden, while also giving Democrats a potential boost ahead of the midterm elections later this year.

But some of the more than 43 million Americans who continue to hold student loan debt would not see any relief from the proposal. Borrowers making $125,000 or more would not qualify for assistance, though it remained unclear exactly how many fall into this category.

Private loan holders would also see no relief on those loans, which are owed to third- party financial institutions, rather than the federal government.

Because the government does not finance private loans, its scope to forgive them is more limited, and the Biden administration has not voiced any support for paying off these loans.

However, the private loans make up only a small amount of the total student loan debt across all borrowers, who owe a total of $1.6 trillion for federal student loans and only $133 billion for private loans, according to Forbes.

In total, only about 8 percent of loans are held privately.

It also remains unknown exactly how much relief will be provided. Biden has reportedly proposed forgiving at least $10,000 in debt, which would wipe the slate clean for millions of borrowers. Others, however, would still be left with tens of thousands of dollars in remaining debt.

Progressives, including Massachusetts Senator Elizabeth Warren, have pushed Biden to consider forgiving up to $50,000 in debt—though he has cast doubt on that figure.

Still, no final decision has been announced about the student loan forgiveness program. It would be the latest effort from the Biden administration to assist those who have large amounts of debt.

Last month, about 40,000 student loan borrowers saw immediate debt forgiveness after the Department of Education revised parts of income-driven repayment programs.

Announcing the program, U.S. Secretary of Education Miguel Cardona said the loans "were never meant to be a life sentence." The Public Service Loan Forgiveness Program eliminated debts of government and nonprofit workers after 10 years of qualifying loan payments.

The Biden administration has also again paused student loan payments last month, expanding the pause due to the coronavirus pandemic. Payments are now set to resume in August.

Newsweek reached out to the White House for comment.