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(NewsNation) — President Joe Biden is canceling some student debt for millions of Americans, delivering at least partially on a campaign promise and hoping to energize younger, college-educated voters ahead of the November midterm elections.

Biden’s plan calls for thousands of dollars in loan cancellations for individuals who earn less than $125,000 a year. For those who went to college on Pell Grants, $20,000 will be forgiven. Those who did not receive that grant will see $10,000 in debt forgiveness.

People with undergraduate loans can cap their repayment at 5% of their discretionary income. After 20 years of monthly payments, people’s undergraduate loan obligation will be fulfilled if it hasn’t already, Biden said.

The move will be the largest forgiveness for individual student debt ever.

“It’s a game-changer,” Biden said during remarks at the White House.

In addition, the student loan payment pause is being extended one final time, Biden said on Twitter, to Dec. 31, 2022. Borrowers should expect to resume payments in January 2023.

The Department of Education estimates that, among borrowers who are eligible for relief, 21% are 25 years and under and 44% are aged 26-39. More than a third are older than 40, including 5% who are senior citizens.

The nation’s outstanding federal student debt now tops $1.6 trillion after ballooning for years, according to the Education Data Initiative. More than 43 million Americans have federal student debt, with almost a third owing less than $10,000 and more than half owing less than $20,000, according to the latest federal data.

“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 if you graduate, you may not have access to middle-class life that the college degree once provided.”

Now, the relief provided by Biden’s plan means “people can start to finally crawl out from under that mountain of debt, to get on top of their rent and utilities, to finally think about buying a home or starting a family or starting a business,” the president said at a Wednesday news conference.

Also at the conference, Biden said the Education Department proposed changes to fix the Public Service Loan Forgiveness program. The program, which gives federal student debt relief to those in public service fields like firefighters and teachers after 120 payments, is “a great idea” but is currently too inefficient and complicated, Biden said.

The decision to provide debt relief comes after pressure from Democrats and activists to forgive even more in loans. Sens. Elizabeth Warren and Bernie Sanders both proposed debt cancellations of $50,000 or more during the 2020 presidential campaign.

“The positive impacts of this move will be felt by families across the country, particularly in minority communities, and is the single most effective action that the President can take on his own to help working families and the economy,” said Sen. Elizabeth Warren on Wednesday in a joint statement with Senate Majority Leader Chuck Schumer.

Beth Akers, a senior fellow at the American Enterprise Institute, said the $10,000 in relief will make a “huge difference” for a lot of loan holders.

“We hear often about these six-figure balances that people get into with graduate and professional degrees, the majority of people have pretty modest balances,” Akers said. “One-third of borrowers with outstanding balances today have less than $10,000 in debt and another 20% have less than $20,000.”

While Biden was initially skeptical, he came to support debt relief during his campaign for the presidency, though his initial proposal had no mention of the income caps. He’s since narrowed that campaign promise as record-high inflation continues to be a drag on his approval ratings.

Republicans have criticized loan cancellations as “unfair” and likely to lead to more inflation. A group of lawmakers this month proposed legislation that would overhaul the federal student loan system, calling their plan an alternative to Biden’s “blanket loan scheme.”

“It will make rising costs worse, rather than address the costs of colleges,” said Rep. Kevin Brady, R-Texas.

Akers said she also fears this move by the Biden administration could raise the cost of college for future students.

“We’re sending the message that dollars that you borrow today are dollars that you won’t necessarily have to pay back, because maybe policy makers will step in again and relieve those debts,” Akers said.

Responding to concerns raised over how the debt forgiveness will be covered, Biden said cutting the deficit will pay for his plan.

“Last year, we cut the deficit by more than $350 billion. This year, we’re on track to cut that by more than $1.7 trillion by the end of this fiscal year,” he said, noting that the recently signed Inflation Reduction Act will cut it by another $300 billion.

Additionally, by resuming student loan payments at the same time as the student debt forgiveness, Biden said the government is taking an “economically responsible course.”

The administration has already canceled $32 billion in loans for more than 1.6 million borrowers. Previous cancellations were given to students who were defrauded by private colleges like ITT Technical Institute and DeVry University.

Student loan payments have also been on pause since March 2020 at the beginning of the COVID-19 pandemic. The moratorium has been extended several times and was originally set to expire on Aug. 31.

Senior administration officials said 8 million borrowers have already submitted forms to the Department of Education, meaning they may be able to receive relief immediately.

The Justice Department released a legal opinion concluding that the Higher Education Relief Opportunities for Students Act gives the Education secretary the authority to reduce or eliminate the obligation to repay the principal balance of federal student loan debt.

Lawsuits are likely nonetheless, the Associated Press said.

In the coming weeks, Biden said the Education Department will lay out a “short and simple form” to apply for student debt relief.

The Associated Press contributed to this report.