President Joe Biden has announced that the federal government will cancel up to $10,000 per student in loan debt and up to $10,000 more for those who have the greatest financial need.
The plan also calls for easing student requirements for repaying remaining debt, reports The Associated Press.
Borrowers who earn less than $125,000 a year, or families earning less than $250,000, would be eligible for the $10,000 loan forgiveness. For recipients of Pell Grants, which are reserved for undergraduates with the most significant financial need, the federal government would cancel up to an additional $10,000 in federal loan debt.
Biden is also extending a pause on federal student loan payments through the end of 2022.
The White House estimates that Biden’s announcement would erase the federal student debt of about 20 million people.
The Education Department will release information in the coming weeks to explain how eligible borrowers can sign up for debt relief. Cancellation for some would be automatic, if the department has access to to their income information, but others would need to fill out a form.
Current students would be eligible for relief only if their loans were originated before July 1, 2022. Biden also has proposed capping the amount that borrowers must pay monthly on undergraduate loans at 5% of their earnings.
