The Biden administration announced the news of canceling up to $10,000 in student loan debt for borrowers earning $125,000 annually. However, $20,000 will be waived for Pell Grant recipients.
Here’s what you need to know
On Wednesday, the Biden administration announced it will cancel up to $10,000 in student loan debt for borrowers earning $125,000 or less every year. Additionally, couples earning $250,000 a year or less and jointly filing taxes also qualify for cancellation of as much as $10,000 per person. However, up to $20,000 can be waived for Pell Grant recipients.
Additionally, the Biden administration is extending the payment pause on student loans till December 31. “In keeping with my campaign promise, my Administration is announcing a plan to give working and middle-class families breathing room as they prepare to resume federal student loan payments in January 2023. ,” tweeted POTUS. President Biden also assured us that he will share more details on Wednesday afternoon.
More on the student loan debt waiver
About 45 million Americans carry the burden of student debt. As per the Federal Reserve‘s estimations, Americans owe over $1.7 trillion in student loans. Federal student loan holders have not been required to pay since March 2020 after former President Trump signed CARES Act. The CARES Act paused payments through September 2020. Additionally, it also stopped the accumulation of interest as an effort of alleviating the economic impact of the pandemic.
President Biden has kept his campaign processing for addressing student loan debt. However, his Wednesday announcement was short of the $50,000 cancellation called by some Democrats. It is also likely to frustrate some relief advocates pushing for a broad range of action. Certain advocates also warned that extending the payment pause will not provide enough time to make changes to the borrower’s balances. “While this announcement is a major win for many, it is important to stress that $10,000 will leave many others still crushed by debt, and important details will determine who has access to much-needed relief,” stated Natalia Abrams. Abrams is the founder and president of the Student Debt Crisis Center.