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Published: Apr 27, 2022 6 min read
Students protest in Washington for student loan forgiveness
Money; Getty Images

Wide-spread student loan forgiveness would predominantly benefit younger Americans living in high-income areas, according to a recent study by the Federal Reserve Bank of New York. But adding an income cap to any forgiveness policy would help to target a larger share of the benefits to borrowers in lower-income areas.

The Fed study comes two years into an interest-free forbearance period that the Education Department recently extended. Now, most federal student loan borrowers won't be required to make payments until September at the earliest.

Advocates of student loan forgiveness have taken the latest extension of the payment pause as a chance to double down on calls for sweeping loan cancellation, saying the Biden administration ought to wipe out millions in debt before turning payments back on.

President Biden, who’s said that he supports forgiving $10,000 of student debt through legislation, hasn’t come out in favor of using executive authority to cancel large amounts of debt. But his officials aren’t shutting down the notion entirely. Earlier this month, Jen Psaki, White House press secretary, said on an interview with the liberal podcast Pod Save America that using executive action to cancel some student loan debt was “still on the table.”