On the afternoon of August 24, President Joe Biden announced a plan to combat the ever-increasing student debt crisis in the country. Those who currently earn an annual income of less than $125,000 are eligible for $10,000 in student loan forgiveness. Low-income students who had received Pell grants in the past are eligible for $20,000 instead. This comes alongside an announcement that the student loan pause, which began due to the COVID-19 pandemic, has been extended through the end of the year. Also eligible for this forgiveness are those with Parent Plus loans, covering parents who take out loans to help pay for their children’s education.
Alongside the outright forgiveness, Biden is pushing changes to the repayment system through the Education Department. Borrowers with loan payments to be made will have monthly payments capped at five percent of their monthly income, half of the previously allowed 10 percent. This rule would additionally include the government covering the borrower’s unpaid interest so that student loan debts won’t balloon like they currently do.
For more information, you can check out the official announcement by the Federal Student Aid office here.