Biden Cancels $10,000 in Student Loan Debt for Borrowers Earning Less Than

Author: Hernandez Lopez 

Following President Joe Biden’s eagerly anticipated statement regarding student loan forgiveness on Wednesday afternoon, lots of Americans will have their student debt canceled or reduced.

Who is eligible for the plan?

If you earn less than $125,000 per year as an individual or $250,000 per year as a married couple, the Biden administration will forgive up to $10,000 in federal student debt and up to $20,000 for Pell Grant recipients. The plan excludes holders of private loans.

In his Tweet, Biden wrote that his Administration introduces a plan to give working and middle-class families breathing room as they prepare to resume federal student loan payments in January 2023.

He also added that he will provide more information on the plan on Wednesday afternoon.

How to benefit from the debt forgiveness program?

StudentAid.gov claims that majority of borrowers will have to submit an online application for the program; an application will be made accessible in a couple of weeks. 

The Department of Education should be able to immediately reduce debt for the nearly 8 million borrowers for whom it has this information.

Biden stated that the delay on student loan repayment, interest, and collections, which was due to end on August 31st, will now last “one last time” through December 31st. 

Since Biden assumed the presidency, the department’s repayment hold has been extended four times. Now it is due to expire on August 31. It was initially implemented in March 2020.

Student loan debt has grown to more than $1.7 trillion and is carried by more than 40 million Americans. The decision should erase at least $321 billion in federal student loans, as estimated by the Federal Reserve, and at least 12 million borrowers will see their debts to the federal government disappear; the estimate, which was made in April 2022, didn’t take into account for the $20,000 termination of Pell Grants, thus the actual figures may be higher.

Biden’s administration has already forgiven over $32 billion in debts, including $13 billion for borrowers who were cheated, which is more than any other administration in American history.

Following a study of 1,500 Americans, 51% of Americans approve likes the $10,000 per borrower idea.

Since his 2020 presidential campaign, Biden has agreed to take off at least $10,000 in student loan debt for each borrower. 

However, some legislators and experts have stated that $10,000 is insufficient and have demanded that the government cancel at least $50,000 per borrower.

Women and persons of color are more likely than others to have higher levels of student debt, despite the fact that the population of people with student debt is varied and comprises members of many political parties, professions, age groups, and racial groups. 

According to the American Association of University Women (AAUW), women are liable for nearly two-thirds of all student loan debt in the United States

However, National Center for Education Statistics reports that White college graduates owe an average of $25,000 less in student loan debt than Black and African American college graduates.

Summary

President Biden has approved a $10,000 loan forgiveness for low and middle income earners. However, some government officials said the amount is too low and that the President should consider waving $50,000 for each borrower. To be a beneficiary of this program, you need to apply via the student aid official website.