After dithering on the topic for the first half of his presidency, President Biden on Wednesday said he would finally make good on a campaign promise and forgive a portion of the $1.6 trillion in debt accumulated by students of higher education in America.

Mr. Biden’s plan, announced on Twitter, is to forgive up to $10,000 for all borrowers earning less than $125,000 and to extend the moratorium on the payment of student loans guaranteed by the federal government through the end of the year. Married couples earning up to $250,000 a year would also be eligible for the forgiveness.

By most accounts, the cancellation plan will cost taxpayers about $300 billion over the next several years.

Recipients of Pell Grants, the federal financial aid that is aimed at the neediest of higher education students, would be eligible for up to $20,000 in loan forgiveness, the president said. More than 40 million Americans are said to be sitting on top of some sort of student loan dating to their college years.

Progressive politicians such as Senators Warren and Sanders and their allies had pressured the president to go even further, canceling $50,000 for each borrower or wiping out the debt entirely. They have argued that the debt burden falls most heavily on Black college graduates, who are estimated to hold an average of $25,000 more in outstanding student loans than white college graduates and are said to be more likely to struggle financially because of those loads. 

Critics of the president’s plan called it a regressive tax that is essentially asking low-income workers and others who didn’t go to college — as well as those who did so without taking on unmanageable debt — to subsidize higher-income workers who did. Most analyses of the current moratorium suggest that it is well-off borrowers with college degrees who are benefiting the most from the policy. 

President Trump first issued the moratorium in spring 2020 after the Covid pandemic threw millions of Americans out of work. Borrowers were allowed to halt payments without penalty, and interest accrual on the loans was suspended. Mr. Biden has since extended the moratorium five times, but has said this latest will be the last.

One estimate by the Committee for a Responsible Federal Budget, a bipartisan Washington think tank led primarily by former budget directors from across government, said that extending the pause through the end of the year will cost taxpayers another $20 billion, on top of the roughly $300 billion that the moratorium has already cost.

In addition to creating further inflationary pressures on the American economy, the committee said the $10,000 reduction would have little long-term impact on student debt levels. By its accounts, overall student debt in the country would return to the current level of $1.6 trillion within four years of the debt cancellation unless reforms aimed at addressing federal financial aid and the overall costs of higher education are undertaken.

It also remains unclear whether the president has the authority to unilaterally cancel the student debt without authorization from Congress, which normally needs to sign off on all spending measures. Speaker Pelosi has stated unequivocally that the president cannot take such action on his own.

“People think that the president of the United States has the power for debt forgiveness; he does not,” Mrs. Pelosi said in July last year. “He can postpone, he can delay, but he does not have that power. That has to be an act of Congress.”

Ms. Pelosi made no mention of her earlier comments in a statement released Wednesday praising the president’s actions.

“By delivering historic targeted student debt relief to millions of borrowers, more working families will be able to meet their kitchen table needs as they continue to recover from the challenges of the pandemic,” Ms Pelosi said. “Importantly, this action will help those most in need, easing a financial burden disproportionately harming women and people of color.”

Mr. Biden’s actions Wednesday are precisely what he promised to do on the campaign trail in 2020. Progressives in the administration and Congress had urged him to go even further, however, suggesting that to do so would fire up the Democrats’ younger voters ahead of November’s midterm elections.

Since taking office, the Biden administration already has forgiven about $32 billion in student debt, most of it accumulated by customers of for-profit colleges that were accused of defrauding their students. Wednesday’s action will extend that forgiveness to all borrowers, about one-quarter of whom owe less than $10,000 according to the Federal Reserve.

Republicans are almost certain to hold Wednesday’s actions up as yet another indication of how the Biden administration is beholden to the more extreme wings of the Democratic Party, and is abandoning working class voters in order to placate upper-income elites.

Senator McConnell, the Senate minority leader, on Wednesday called Biden’s plan a “slap in the face” to millions of Americans.

“Washington Democrats have found yet another way to make inflation even worse, reward far-left activists, and achieve nothing for millions of working American families who can barely tread water,” he said in a statement released after the president’s announcement.

“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 volunteered to serve in our Armed Forces in order to avoid taking on debt,” he added.