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President Joe Biden announced Wednesday that he will cancel up to $20,000 in student loan debt for Pell Grant borrowers and up to $10,000 for borrowers who earn less than $125,000 a year.

The loan forgiveness plan also applies to households that earned less than $250,000 a year.

The plan will eliminate $20,000 in student debt for the poorest borrowers who received Pell Grant loans for college education.

Biden also extended the moratorium on student loan repayments through December 2022.

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More than 40 million borrowers will benefit from the unprecedented $300 billion forgiveness plan.

Republicans argue that the bailout plan benefits rich kids who attended law school and medical school and can afford to pay back their loans.

Senate minority leader Mitch McConnell called the plan "student loan socialism" and a "slap in the face" to those who already paid off their debt.

The GOP said rich kids who live at home with their parents will benefit most from the loan forgiveness plan.

Republicans warn that Democrats will face ramifications during the midterm elections in November.

Republicans vowed to challenge the plan in court.

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President Joe Biden's decision to forgive $10,000 in student loan debt will come on Wednesday, August 24, according to reports.

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Biden is expected to announce his decision to forgive $10,000 in student loan debt for borrowers earning less than $125,000 a year. The plan is expected to cost taxpayers $32 billion.

Eligible borrowers include those with federal Direct Loans, FFELP Loans, Perkins Loans, Parent Plus Loans and Grad PLUS Loans.

The White House claims Biden has already canceled more debt than any other administration in history.

Biden will also extend the moratorium on paying back loans for people earning over $125,000.

At $1.6 trillion, student loan debt exceeds credit card or auto loans in the 50 United States.

A majority of Americans are concerned the student loan forgiveness plan will further increase inflation.

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The White House has extended the student loan repayment deadline through May 1, 2022 -- just weeks before the moratorium was set to expire.

The White House extended the deadline amid pressure from progressive Democrats, concerned about a bloodbath during the midterm elections.

Pres. Joe Biden paused the repayment moratorium due to the mild Omicron variant.

In a statement on Tuesday, Biden said "millions of student loan borrowers are still coping with the impacts of the pandemic and need some more time before resuming payments."

The president previously refused to extend the repayment moratorium past February 1, saying his decision was "final."

Voters are pressuring Biden to cancel all federal student loan debt, as he promised to do prior to the 2020 election.

The reaction on Twitter was a mix of relief and frustration at the delay in canceling student loan debt.

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Billionaire Robert F. Smith made headlines in May when he made a generous pledge to pay off student loans for Morehouse College graduates.

Now Smith has extended his pledge to pay off the debts of their parents as well.

The pledge to pay off student loans for Morehouse grads and their parents will cost Smith $34 million.

The graduates learned of Smith's new pledge to pay off the educational debt of their parents in a letter sent out by the school.

"On behalf of the eight generations of my family who have been in this country, we're gonna put a little fuel in your bus," said Smith during his surprise announcement at Morehouse College in May.

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"Now I've got the alumni over there. This is a challenge to you, alumni. This is my class, 2019. And my family is making a grant to eliminate their student loans," said Smith, referring to his wife, Hope.

22-year-old finance major Aaron Mitchom figured he could pay off $200,000 in student loans in 25 years if he allotted half his salary to the debt.

After hearing Smith's announcement at the commencement in May, Mitchom cried.

"I don't have to live off of peanut butter and jelly sandwiches. I was shocked. My heart dropped. We all cried. In the moment it was like a burden had been taken off," he said in an interview after the commencement.

Tina Mitchom, Aaron's mom, said eight family members, including Mitchom’s 76-year-old grandmother, co-signed on the loans to help him graduate.

"It takes a village," she said. "It now means he can start paying it forward and start closing this gap a lot sooner, giving back to the college and thinking about a succession plan' for his younger siblings."

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