This week, President Biden announced a plan to forgive up to $20,000 in student loans for income-eligible Americans, regardless of age. According to the White House’s released fact sheet, Biden’s policy will provide relief for up to 43 million borrowers.“How do we remain the most competitive nation in the world? That’s what today’s announcement is about. It’s about opportunity. It’s about giving people a fair shot,” Biden said in a statement announcing the policy. “It’s about the one word America can be defined by: possibilities.”

Borrowers making under $125,000 annually will receive $10,000 in loan forgiveness. Any eligible borrower who was Pell Grant-eligible will receive an additional $10,000 in relief. Only federal student loans qualify, not private loans. According to CNN, graduate loans can be eligible for forgiveness, provided the borrower falls under the $125,000 annual income threshold.Biden’s forgiveness plan does not require Congressional action, and Republicans have strongly critiqued his decision.“President Biden’s student loan socialism is a slap in the face to every family who sacrificed to save for college, every graduate who paid their debt, and every American who chose a certain career path… to avoid taking on debt,” Senator Mitch McConnell said in a statement. “This policy is astonishingly unfair.”

One stated goal of the policy is racial equity. The Brookings Institute found that the average Black graduate owes $25,000 more than the average white graduate. According to a 2021 report from the Urban Institute, a Pell Grant-targeted student loan forgiveness program would take steps to reduce the racial wealth gap by disproportionately benefiting Black borrowers. The White House cited this study in its own report.