President Joe Biden will announce his administration’s plan for student loan debt relief at 1:15 p.m. Central time on Wednesday.
The Biden administration released a three-part plan to provide student loan debt relief after campaigning on student loan forgiveness in the 2020 election.
Part one will extend the student loan repayment pause started in March 2020. The pause was set to end on Aug. 31, 2022, but will be extended “a final time” to Dec. 31, 2022, according to the Department of Education’s Federal Student Aid website.
I’ll be delivering remarks on my Administration's student loan debt relief plan at 2:15 PM ET.In the meantime, go to https://t.co/80wXPTae6V for more information.
— President Biden (@POTUS) August 24, 2022
Part two will provide “targeted debt relief to low- and middle-income families.” All eligible borrowers will be required to have an annual income under $125,000 for individuals or $250,000 for married couples or heads of household.
Recipients of the Pell Grant will be eligible for up to $20,000 in forgiveness on loans held by the Department of Education. Borrowers without the Pell Grant will be eligible for up to $10,000.
Part three will adjust the income-driven loan repayment plans already in place for federal loans in an effort to “substantially reduce future monthly payments for lower- and middle-income borrowers.”
It will decrease the monthly payment based on income, raise the amount of income that is considered nondiscretionary, forgive loan balances after 10 years of payments for borrowers owing $12,000 or less and cover unpaid monthly interests.
More details will be announced in the coming weeks, according to the Department of Education’s Federal Student Aid website.