On Wednesday, Aug. 24, President Biden announced the Department of Education will start providing student loan relief.
“During the campaign, [President Biden] promised to provide student debt relief. Today, the Biden Administration is following through on that promise and providing families breathing room as they prepare to start re-paying loans after the economic crisis brought on by the pandemic,” a White House press release said.
Currently, approximately 45 million borrowers owe $1.6 trillion in federal student loan debt. In the White House press release fact sheet, the “Department of Education will provide up to $20,000 in debt cancellation to Pell Grant recipients with loans held by the Department of Education, and up to $10,000 in debt cancellation to non-Pell Grant recipients. Borrowers are eligible for this relief if their individual income is less than $125,000 ($250,000 for married couples).”
However, the White House said individuals and households who are in the high-income bracket, which is the top 5%, do not qualify and will not receive student loan relief, whether Pell Grant recipient or non-Pell Grant recipient.
According to an article from Inside Higher Ed, “Of the 45 million Americans with student loan debt, 90 percent of the debt relief from today’s announcement will go to individuals earning less than $75,000 a year…This will provide additional relief to individuals from low-income backgrounds. Pell recipients have an average of $4,500 more in student debt than other graduates.”
The White House said in order “to ensure a smooth transition to repayment and prevent unnecessary defaults, the pause on federal student loan repayment will be extended one final time through December 31, 2022. Borrowers should expect to resume payment in January 2023.”
Get the full White House press release fact sheet here.
Get the full Inside Higher Ed official article here.
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