Biden forgives $10,000 in student debt for most borrowers

President Biden on Wednesday announced his plan to forgive $10,000 in federal student loan debt for borrowers making under $125,000 a year, "honoring" one of his campaign promises and handing a win (albeit smaller than desired) to the progressive wing of his party.

"When this happens," Biden said Wednesday, "the whole economy is better off."

Pell Grant recipients who make less than $125,000 will be eligible for up to $20,000 in forgiveness. Broad-level debt cancellation will apply to students with "federal loans from undergraduate and graduate programs, as well as Parent Plus loans," The Wall Street Journal writes.

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The president also extended the current student loan repayment moratorium, scheduled to expire on at the end of this month, until Dec. 31; borrowers should expect payments to resume in January 2023, the White House said.

Additionally, the administration cut from 10 percent to 5 percent the amount that borrowers enrolled in an income-driven repayment plan must pay from their discretionary income each month.

Progressive Democrats have long urged President Biden to cancel up to $50,000 in student debt per borrower. But Republicans and other critics, meanwhile, fear widespread forgiveness will contribute to rampant inflation, and find it unfair to those who have already paid off their loans or didn't go to college. Superficially, writes The New York Times, "the move could cost taxpayers about $300 billion or more in money they effectively lent out that will never be repaid."

Borrowers can expect more details on how to apply for the debt relief program in the coming weeks, a senior administration official told CNN.