Individuals who make less than $125k/yr will get up to $10k of student debt forgiven, and up to $20k if they are Pell Grant recipients.
Biden is also proposing a new income-based repayment program that will cut payments on undegraduate loans in half from 10% to 5%.
The Committee for a Responsible Federal Budget calculates the budget impact at somewhere between $440 billion and $600 billion over a decade. The University of Pennsylvania’s Penn Wharton Budget Model estimates just over $600 billion over 10 years.
Biden and the Democratic Party are clearly buying votes ahead of the November midterm elections. This policy is merely a bandaid that doesn't fix the core underlying problem that's causing the student debt crisis in the first place. Unfortunately the U.S government is not capable of achieving anything more than tiny bandaid patches due to its inefficient two-party government system and the country's extreme polarization.
That being said some student debt forgiveness is still better than nothing. Student debt in the U.S is outrageous and effectively serves as a tax on children of the middle class. Even if this is just a pathetic bandaid that doesn't address the root problem, it gets the ball rolling towards more comprehensive legislation down the line, even if it might not be for another 5-10 years.
Inevitably at some point most student loan debt will be forgiven, and the U.S education system will be overhauled. Millennials - the first generation to be screwed by student loans - will not hesitate to wipe out student loans as soon as they get in power. Sure some will complain that it's unfair that they paid their student loans while others don't have to, but that argument is as logically sound as arguing to keep sexual harrassment permissible in the workplace because you already slept with your boss for a promotion, and won't hold much water.
Affordable higher education is a solved problem that every other country has solved outside of the U.S, but the failed government of the U.S keeps it from being solved (similar to its healthcare system). Even though this policy is a pathetic attempt at making progress, some progress is still better than nothing, and it's a sign of things to come - even if the U.S will be 20-30 years behind everyone else in the first and third world who look down in pity at the U.S's total failure in solving such basic simple problems.