Key Points:
- Biden’s Administration will forgive around $20,000 of student’s debt who have Pell Grants and $10,000 of student loans with no Pell Grants.
- There is an extension to the student loan repayment till December 31, 2022
The Biden administration announced on August 24, 2022, a plan that would impact student loan debt. The three-part plan provides help to students by canceling up to $20,000 debt for students who were provided Pell Grants and $10,000 to students who did not receive Pell Grants. For students to be able to get the deft relief they need to be making less than $125,000 if they are single or less than $250,000 if they are married. The plan also stated that there will be an extension to the student loan repayments until December 31, 2022.
With Biden’s administration new plan, they plan to make two major changes. One is the change of the monthly payment plan from 10% to 5% of a student’s discretionary income for undergraduate loans. The second change would be that students will not need to make monthly payments to their loans if they are making less than 225% of federal poverty level. Students who have a debt less than $12,000 will be forgiven after 10 years instead of the 20 years they have now.
If you want to more information about the student loan relief, check out the Fact Sheet in The White House website. If you have any questions or need help with your financials, contact us.
White House Website: Fact Sheet
