Watch live: President Biden speaks about federal student loan forgiveness and the payment pause

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Visit CNBC's Personal Finance page for coverage of Biden's remarks and how they affect borrowers.

President Joe Biden announced Wednesday that he will forgive $10,000 in federal student debt for most borrowers, fulfilling a campaign pledge and delivering financial relief to millions of Americans.

Biden will cancel up to $20,000 for recipients of Pell Grants.

The relief will be limited to Americans earning less than $125,000 per year, or $250,000 for married couples or heads of households. The relief is also capped at the amount of a borrower's outstanding eligible debt.

The president will also extend the payment pause on most federal student loans through Dec. 31, 2022. The pause began in the Trump administration as a response to the pandemic. The payments have since been suspended repeatedly.

At least 9 million borrowers could have their balances entirely cleared by Biden's plan, according to higher education expert Mark Kantrowitz.

There's no precedent for the government canceling hundreds of billions of dollars in consumer debt.