Biden Will Forgive $10,000 Of Your Student Loans — If You Make Under $125,000

President Joe Biden announced Wednesday that the government will forgive up to $10,000 in federal student loan debt for Americans making less than $125,000 per year, while the pause on repayments for all graduates will be extended for a seventh and final time until January.

Married couples are eligible for relief under the president's plan if their combined income is less than $250,000, while recipients of a Pell Grant, the program for needs-based grants to low-income undergraduate students, will have up to $20,000 of debt per person canceled.

The White House estimated that 87% of the debt cancellation benefits will go to borrowers who are presently earning less than $75,000 per year.

In other moves administration officials said were aimed at making "the student loan system more manageable for current and future borrowers," the Department of Education is proposing rules to cap repayments on undergraduate loans for borrowers at 5% of their monthly income, and to end repayment obligations after 20 years or 10 years for those whose original balance was less than $12,000.

"These changes will save more than $1,000 a year on average for the borrower," Biden said in remarks at the White House. "It's a game changer."

The administration will also take steps to better reform the Public Service Loan Forgiveness to make it easier for those that serve 10 years in the military or government to get credit for eventual loan forgiveness.

"I understand not everything I'm announcing today is going to make everybody happy," Biden said. "But I believe my plan is responsible and fair. It focuses the benefit on middle-class and working families, and helps both current and future borrowers, and it will fix a badly broken system."

The president also dismissed criticisms the plan was unfair to those who had already paid off their loans, telling reporters it's not fair when average people lose out on benefits received by billionaires.

The announcement comes after more than a year of Biden deferring a decision on an issue on which he’d campaigned amid internal arguments among Democrats about the plan. The president had been under immense pressure from the left to ease the economic suffering of the more than 40 million Americans who hold student debt, but some economists had warned that mass forgiveness could worsen inflation.