President Joe Biden Said on Wednesday what many have waited for a quite long – he launched a plan to forgive or decrease student loan debt for millions of borrowers.
As per Biden’s student loan forgiveness plan – If someone earn less than $125,000 annually, will be eligible to receive cancellation of up to $10,000 in federal student loans.
If you received a Pell Grant, you can get up to $20,000 forgiven. If you’re not fall under these criterias of this student loan, your pause on repayments continues to be paused until year end.
He also said that, The Department of Education is also working on a proposal introducing a new repayment plan to reduce the burden on borrowers.
Since the start of the Covid19 pandemic in 2020, borrowers haven’t had to pay a cent on their federal student loans due to circumstances. During this time, the pressure grew for the president to cancel theirs debts. The same camapign Biden ran on for US president in 2020.
This student loan forgiveness plan was welcomed by many, But still garnered criticism. Some people demanded for higher forgiveness amounts – $50,000 or even all amounts, no matter how large. The total outstanding balance for federally owned (including defaulted) student loans in December 2021 was $1.38 trillion, the New York Federal Reserve said in April.
What’s Biden’s student loan forgiveness plan?
Individuals with an annual income of less than $125,000 (or under $250,000 for married couples or heads of households) are entitled to have up to $10,000 in federal student loans canceled. No private loans will be forgiven.
Also the student, who received a Pell Grant in college will be eligible for up to $20,000 in debt cancellation.
For those who still have student debt, the repayment pause since March 2020 will be extended to the end of the year. Borrowers will resume payments in January.