EVERYTHING YOU NEED TO KNOW: BIDEN’S STUDENT LOAN FORGIVENESS PLAN
President Joe Biden has extended the current pause on student loan payments, which was set to expire on Aug. 31. In a tweet on Wednesday, Biden announced the moratorium would be extended “one final time” through Dec. 31, 2022.
As expected, the White House also announced a long-awaited executive action erasing up to $10,000 in federal student debt for borrowers making less than $125,000 a year — or $250,000 for married couples.
The president, who said he would go into more detail in a press conference Wednesday afternoon, also announced that Pell grant recipients will have $20,000 of their student debt erased. Borrowers with undergraduate loans will be able to cap repayment at 5% of their monthly income.
In keeping with my campaign promise, my Administration is announcing a plan to give working and middle class families breathing room as they prepare to resume federal student loan payments in January 2023.
I'll have more details this afternoon. pic.twitter.com/kuZNqoMe4I
— President Biden (@POTUS) August 24, 2022
Here’s everything you need to know:
Who’s eligible?
Individuals with federal student loans who make under $125,000 per year, or couples earning less than $250,000, qualify for up to $10,000 in forgiveness.
That includes current students: Borrowers who are dependent students will be eligible for relief based on their parents’ income. Parent PLUS loans, which are federal loans for parents of undergraduate students, are also eligible under the president’s plan. (Loans taken out after June 30, 2022, will not qualify.)
Qualified borrowers who received Pell Grants are eligible for additional relief up to $20,000.
How do I apply?
The Education Department said nearly 8 million borrowers already have income information on file, and should qualify to have their debts canceled automatically.
The timing of debt relief and more information is to come in the upcoming weeks.
Did I receive a Pell Grant?
If you’re unsure whether you received a Pell Grant as part of your financial aid package, you can check your account on studentaid.gov. On the main page of your account, there’s a section titled “My Aid.”
Alternatively, you can check with the financial aid office of the college you attended to see if it can provide you with that information.
