Biden Administration Cancels $10,000 in Student Loans

Fulfilling a campaign promise, President Biden announced on Wednesday, August 24, the forgiveness of $10,000 in student debt for certain borrowers and the extension of the student loan payment freeze until December 31, 2022.

The Biden administration has already canceled nearly $32 billion of the $1.6 trillion in outstanding federal student loan debt, expanding existing forgiveness programs for public sector employees, borrowers with disabilities, and students defrauded by for-profit colleges.
See below for details of the program announced by the government
Who qualifies
The plan applies only to FEDERAL student loan borrowers. That is, if you borrowed money from a private institution, nothing changes for you.
How much will be forgiven
The amount of debt that will be canceled depends on whether the borrower received a certain type of aid, the so-called “Pell Grant.” This type of grant is only awarded to undergraduate students who “demonstrate exceptional financial need and have not yet obtained a bachelor’s, graduate, or professional degree.” Most of the time, this grant does not have to be repaid, except under certain circumstances,” according to the Student Aid Office of the Department of Education.
Borrowers earning less than $125,000 per year and couples or heads of household earning less than $250,000 per year will have up to $10,000 of their federal student loan debt forgiven, if they did not receive the “Pell Grant.” Borrowers within the same income limits who received the “Pell Grant” will have up to $20,000 of their debt forgiven.
How to proceed to obtain forgiveness
Nearly 8 million borrowers will receive debt forgiveness automatically because the Department of Education already has their income information. For others, the Biden administration will launch an application in the coming weeks for borrowers to provide their income information to the Department of Education.
What happens to the remaining debt payments?
Student loan payments will remain suspended until December 31, 2022, resuming in January 2023.
The Biden administration is also proposing a rule to create an income-driven repayment plan, in which borrowers will not pay more than 5% of their monthly income on student loans, a reduction from the current cap of 10%.
For more information on the new rules for student loans, sign up for updates from the Department of Education at the link: https://www.ed.gov/subscriptions