White House considering income cap on student loan forgiveness, hasn’t studied impact on inflation

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President Biden plans to use income to determine eligibility under any student loan forgiveness program, the White House said Monday.

Last week, the president raised the possibility of eliminating $10,000 of debt per student borrower, likely through executive action.

At Monday’s White House press conference, press secretary Jen Psaki was asked if an income cap for any potential student aid program was under consideration.

White House Press Secretary Jen Psaki speaks during a press briefing at the White House, Wednesday, April 20, 2022, in Washington.
(AP Photo/Evan Vucci)

ERADICATING STUDENT LOAN DEBT COULD DISPROPORTIONATELY BENEFIT WEALTH AMERICANS

“There are,” PSAki said.

It is unclear at this point what the maximum income for student loan forgiveness would be, if an income cap were included in the possible plans. Officials have reportedly raised the possibility of limiting the relief to people who earned less than $125,000 or $150,000 as individual filers in the previous year. This would equate to a threshold of about $250,000 to $300,000 for couples who file their taxes jointly.

PSAKI noted that the income caps would ensure that student loan relief is “targeted to those who need the help the most.”

PSAki was also pressed on whether the White House had analyzed the potential impact of a student loan cancellation on inflation.

President Joe Biden boards Air Force One at Brussels Airport in Brussels, Tuesday, June 15, 2021. Biden is on his way to Geneva.  (AP Photo/Patrick Semansky)
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President Joe Biden boards Air Force One at Brussels Airport in Brussels, Tuesday, June 15, 2021. Biden is on his way to Geneva. (AP Photo/Patrick Semansky)

“I know there’s been outside analysis on this, but I don’t have any inside analysis at this point to preview you,” she said.

Last week, the president said he was “planning to face debt reduction.”

“I’m not looking at a $50,000 debt relief, but I’m carefully considering whether or not there will be additional debt relief,” Biden said.

BIDEN EXTENDS STUDENT LOAN REPAYMENT BREAK UNTIL AUGUST. 31, TELLING US “STILL RECOVERING” FROM COVID-19

Biden supported writing off $10,000 in student debt for most borrowers during his presidential campaign, but raised questions about his legal authority to do so by executive order. Last year, the president requested a memo from the Department of Education to determine whether he had the authority to unilaterally write off student loan debt.

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Meanwhile, the president extended the freeze on student loan repayments until August 31, citing continued economic hardship caused by the Covid-19 pandemic. Former President Donald Trump has for the first time announced a refund freeze in 2020.

Fox News’ Megan Henney contributed to this report.

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