Ahead of another deadline on the restart of payments for America's $1.7 trillion in federal student loans, President Joe Biden on Wednesday announced a plan to cancel debt for a subset of Americans and continue to keep a pandemic-era pause on repayments -- a sweeping move he has openly weighed in some form or another since his time as a candidate.
Speaking from the White House's Roosevelt Room, Biden outlined his plan to forgive tens of thousands of dollars for individuals earning less than $125,000 a year.
"An entire generation is now saddled with unsustainable debt in exchange for an attempt at least at a college degree," Biden said. "The burden is so heavy that even if you graduate, you may not have access to the middle class life that the college degree once provided."
"The pandemic only made things worse," he continued, noting that many people can't afford to buy homes or are putting off starting a family in part because of their student loan debt.
People who took out Pell grants to pay for college, which are grants given to low-income borrowers, can qualify for up to $20,000 in debt forgiveness as part of Wednesday's broader announcement on student loan forgiveness. Other student loan borrowers who don't have Pell grants will still have loans forgiven up to $10,000,
Both forgiveness options are for people who earned less than $125,000 per year, or $250,000 as a household, in either the 2020 or 2021 tax year.
"If all borrowers claim the relief that they're entitled to, 43 million federal student loan borrowers will benefit, and of those, 20 million will have their debt completely canceled," a senior administration official said on a call with reporters on Wednesday, detailing the plan.
According to the White House, 60% of borrowers have Pell grants, meaning the majority of borrowers are eligible for the larger forgiveness. And because people are only eligible for Pell grants if they can show that their family can only contribute a certain amount per year toward college, the Biden administration says narrowing in on relief for these recipients will help target people with the highest economic need.
Biden on Wednesday also announced an extension of the pause on student loan payments through Dec. 31, 2022 -- the final extension -- a move that's intended to give time for the transition back to repayment.
Biden unveiled the first details of the so-called "Student Debt Relief Plan" earlier Wednesday through a fact-sheet posted to Twitter.
"In keeping with my campaign promise, my Administration is announcing a plan to give working and middle class families breathing room as they prepare to resume federal student loan payments in January 2023," Biden wrote in the post.
In keeping with my campaign promise, my Administration is announcing a plan to give working and middle class families breathing room as they prepare to resume federal student loan payments in January 2023.— President Biden (@POTUS) August 24, 2022
I'll have more details this afternoon. pic.twitter.com/kuZNqoMe4I
Amid questions about how the plan will be paid for, Biden said Wednesday there's "plenty of deficit reduction" to pay for the proposals.
"I will never apologize for helping working people and middle-class Americans," he said.
Such a major cancelation may seem like a big step for Biden to take without Congress, but legal and policy experts say it's clear: The move would be well within the president's authority -- it just hasn't been wielded before because of the political implications.
"The president has some pretty broad authority under the Higher Education Act," said John Brooks, a law professor at Fordham University who focuses on federal fiscal policy.
"A lot depends on the size of the cancellation. The smaller the amount of cancellation, the easier the question is," Brooks said. "Wiping out all student debt with a single stroke might be tougher, but the president through the secretary of education does have the power to adjust the amount of loan principle that any borrower has."
Still, Biden could get taken to court -- possibly by loan servicing agencies who would lose revenue or by members of Congress who may believe Biden is spending money in a way that hasn't been appropriated by legislators.
Outside experts also wonder how long the processes would take to cancel student loans once a policy is announced -- and how complicated it would be for borrowers to work their way through it, which are details that have yet to be released.
Some fear that people might fall through the cracks if applications to cancel debt become too labor-intensive because of the prospective income cap.
"The White House is about to ask the Education Department to do something that is extraordinarily difficult, and that is going to have the effect of denying debt relief to low-income folks, economically vulnerable folks, who have the hardest time navigating these complicated paperwork processes," Mike Pierce, executive director and co-founder of the Student Borrower Protection Center, a think-tank that advocates for universal debt cancellation, told ABC News in an interview.
Pierce and other supporters for more progressive debt cancellation, including the NAACP, said the smoothest path would include full and universal cancellation for everyone.
"If the rumors are true, we've got a problem. And tragically, we've experienced this so many times before," NAACP President Derrick Johnson said in a statement Tuesday, reacting to the details of the potential policy announcement before they were announced.
"President Biden's decision on student debt cannot become the latest example of a policy that has left Black people - especially Black women - behind. This is not how you treat Black voters who turned out in record numbers and provided 90% of their vote to once again save democracy in 2020," Johnson said.
But for many borrowers and advocates for canceling student debt -- particularly the nearly half of people with federal student loans who would see their debt extinguished or cut significantly -- Biden's policy would still be cause for major celebration and be seen as a start to reforming the college and university system, where rising costs have become a major area of focus.
For Michigan teacher Nick Fuller, speaking before Biden's announcement, his move comes just before the financial crunch of winter, when his heating bills skyrocket.
Though Fuller worked hard his first few years out of school to pay down his school debt, and then had his loan frozen for much of the pandemic, he's concerned that restarting payments on top of monthly living costs could put him over the edge.
"I think things will get really tight in the winter because my utility bills are higher," Fuller told ABC News. "I mean for January and February -- the highs are zero and the lows are -20 [degrees] for almost two months."
The frozen temperatures might sting a little bit less if Biden forgives $10,000 of Fuller's remaining student loan bills, he said.
"It's about two-thirds of the debt that I have left," he said.
That would make payments "a lot more affordable and a lot more manageable in my situation," he said.
Easing the student debt crisis -- which is also how Trump Education Secretary Betsy DeVos described the issue in 2018 -- could also aid a crippling teacher shortage that has caused thousands of staff vacancies at the start of the latest school year, something Fuller has seen himself.
Pinched salaries and rising inflation have had many teachers on edge with the loan forgiveness deadline approaching.
And because Black students are among the fastest growing group of people taking on debt, advocates have argued that canceling some student loans would begin to address racial inequities.
Shareefah Mason, the dean of Educator Certification at Dallas College, feels this impact firsthand as a Black woman with student debt. She leads the apprenticeship component of a program that pairs students with residency partners to ensure they earn while they learn, effectively reducing education debt for aspiring teachers.
"I bear the weight of $70,000 in student loans," Mason told ABC News. "The data shows that student loan debt exponentially impacts and disproportionately impacts Black women."
The average amount of student debt accrued by Black women is more than any other group at $38,800, according to Education Trust, a nonprofit focused on education reform.
But Mason's program, the very first full-time paid teacher apprenticeship in the state of Texas, allows students to earn one of the cheapest bachelor's degrees in the state, Mason said.
The goal, she said, is to aid future educators in breaking the generational barriers that she has faced as a Black woman.
Mason said "they will not have to worry about student loan debt," which could open more doors for minority communities that have historically lacked the means to access higher education. "My students will be able to earn, as a first year teacher in the city of Dallas, upwards of $60,000," Mason said.
For the nation's borrowers most affected, Mason said, "there needs to be a space created for them to make enough money to pay their student loans without having to sacrifice their ability to create generational wealth for their families."
ABC News' Mariam Khan and Benjamin Siegel contributed to this report.