For the first time in history, some student loan debt is being canceled free and clear by the federal government.
President Joe Biden made the announcement Wednesday saying through the Biden-Harris Administration's Student Debt Relief Plan up to $20,000 in outstanding student loan debt would be forgiven for those on Pell Grants and up to $10,000 for those who did not receive Pell Grants.
To qualify for loan forgiveness a person must only earn less than $125,000 per year or $250,000 in their household.
Biden is also extending the pause on payments one final time through the end of this year.
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Those who owe money on student loans say they're relieved while some others are questioning the president's decision.
Laquinta Layton, of Lewisville, is one of 43 million Americans breathing a sigh of relief after learning of the president's plan.
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"I'm floored. I'm excited. I'm grateful. I believe it gives me the opportunity, and other people like me, an opportunity to really harness our lives," said Layton.
She said she repaid the loans she took out for her bachelor's degree but has struggled to repay federal loans used for her master's program at Dallas Baptist University.
Some say the amounts forgiven by the president's plan are not enough while others say forgiveness isn't fair.
"We have to ask ourselves, 'Can we afford it?' And if we can afford it are these the people we want to spend that money on?" said SMU economics professor Mike Davis who worries about the estimated $300 billion price tag amid 40-year high inflation.
"We already know that we have inflation because there have been unprecedented levels of government spending and now we want to spend even more. It's worrisome," Davis said, adding it could lead to even higher inflation.
Cadece Franks Sanders, a college graduate, said the relief plan is a great burden lifted. She said she could pay her loan back but that it would just take a long time.
"No one signs up for something with the thought 'I'm not going to pay this back.' But circumstances in your life dictate what you're able to do," Sanders said.
Though the benefit covers earners up to $125,000 per year Biden said Wednesday on Twitter that "almost 90% of the benefit will go to folks making less than $75,000 a year."
But while expected to provide a financial boost to 43 million Americans, Dean Stansel, an economist and policy analyst at the Bridwell Institute for Economic Freedom at SMU’s Cox School of Business, said it doesn’t actually solve the problem.
"This program does nothing to reduce the rapidly rising costs of going to college, which is what's behind these rising debt burdens,” said Stansel.
He added, that could be a contributing factor to inflation, which critics have said will increase under the plan.
Forgiveness also comes at a hefty price, about $300 billion according to a Penn Wharton budget model.
"To put that, in perspective, that's about the same amount that the recently passed Inflation Reduction Act was supposed to reduce the deficit, so it kind of washes out all of those deficit reduction savings," said Stansel.
Collectively, student loan borrowers owe more than $1.7 trillion.
