President Joe Biden announced Wednesday that billions of dollars of federal student loan debts will be canceled to keep his campaign promise of providing debt relief to students.

The administration's plan includes debt forgiveness for certain borrowers and extending the COVID-19 pandemic-related pause on student loan repayment, BBC reported.

Speaking from the White House on Wednesday, Biden said: "People can finally crawl out under that mountain of debt." He noted that the move would provide more "breathing room" to working and middle-class families.

The most important questions that come with the president's announcement are - who qualifies for loan debt forgiveness and how much forgiveness they will see. The plan applies to federal student loan borrowers and includes the cancellation of up to $10,000 of their student loan debt. Individuals with an income of less than $125,000 or married couples with an income of $250,000 are eligible for the relief, Reuters reported.

"No high-income individual or high-income household – in the top 5% of incomes – will benefit from this action," read a White House statement.

The amount of debt forgiven could be up to $20,000 if the borrower received a Pell Grant, which is given to undergraduate students who "display exceptional financial need" and do not have a bachelor's, graduate or professional degree, according to the Department of Education's Federal Student Aid office website.

The debt forgiveness will automatically take place for nearly 8 million borrowers since their information is already available with the Department of Education. The administration will launch an application for other borrowers whose income data is not available to the department.

The administration also announced that the pandemic-related pause on student loan repayment will be extended. Since March 2020, borrower balances were frozen due to the outbreak of COVID-19, and Wednesday's announcement said the pause will remain till the end of this year.

The plan was received with open arms by some while others criticized the move and political analysts called it a move to win for the support of young voters ahead of the November midterm elections, BBC reported.

"On the one hand, this is a landmark victory for our movement," said Astra Taylor, co-founder of the Debt Collective, a union for debtors, according to CNBC.

"Yet, President Biden should have, and could have, done much more than cancel $10,000 or [$]20,000 — and he could have made the relief automatic, instead of imposing unnecessary hurdles," Taylor added.

Nick Marcil, 24, who earned scholarships and worked as he pursued his higher education at Pennsylvania state college, said the debt forgiveness will be a significant relief.

"I feel like if I don't have that burden, I'd be more likely to, you know, try to move out — try to have, you know, my own place," Marcil, who owed $18,000 before Wednesday's announcement, told AP News.

However, some students believe that the debt forgiveness plan will be an unnecessary burden on taxpayers that comes after many individuals worked hard to save enough and pay their loans by themselves.

"It took both of my parents years to pay off their college debt, and now they're being told that if they had just waited for a little while it simply would've vanished," said George Washington University student Jackson Hoppe, 19, who has federal students loans of his own.

Some also believe the $10,000 debt forgiveness is a mere dent in the problem.

Christian Smith, 32, will walk out of the University of Colorado Denver next year with an undergraduate degree as well as $60,000 in student debt. The amount is the same as the annual income of her household. "It's overwhelming," she said.

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Smith said she is holding off on her plans to have children until she pays off her school debt. She said Black women like her, who hold a larger share of student debt than white undergraduate degree-holders, would have benefitted a lot more if Biden's administration decided to provide more relief.

Representational image: College classroom
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