How Biden tied $15 minimum wage to student loan relief?

By The Exchange Team

The Biden administration's student loan strategy looks tied to its $15-an-hour minimum wage drive.

The White House announced a plan to cancel up to $20,000 in federal student debt and freeze payments through 2022.

The policy package included modifications to "income-driven repayment arrangements." These plans lower low-income borrowers' monthly payments.

A borrower with income below 150% of the federal poverty level has no monthly loan payment.

In 2022, that's $20,385 before taxes for a single person, or $9.80 an hour. Biden supported raising the bar to 225% of the federal poverty level, or $14.70 an hour.

According to student loan experts, more borrowers in income-driven plans will qualify for a $0 monthly payment or a reduced monthly expense.

Whitney Barkley-Denney, senior policy counsel at the CRL, said these modifications help borrowers avoid default.