President Biden, Vice President Harris, and the U.S. Department of Education have announced a three-part plan to help working and middle-class federal student loan borrowers transition back to regular payment as pandemic-related support expires. This plan includes loan forgiveness of up to $20,000. Here is a summary of the three keys parts of the plan:
Part 1. Final extension of the student loan repayment pause
The repayment pause has been extended a final time through December 31, 2022, with payments resuming in January 2023.
Part 2. Providing targeted debt relief to low- and middle-income families
The U.S. Department of Education will provide up to $20,000 in debt cancellation to Pell Grant recipients with loans held by the Department of Education and up to $10,000 in debt cancellation to non-Pell Grant recipients. Borrowers are eligible for this relief if their individual income is less than $125,000 or $250,000 for households.
Part 3. Make the student loan system more manageable for current and future borrowers
Income-based repayment plans have long existed within the U.S. Department of Education. The new income-driven repayment plan that will substantially reduce future monthly payments for lower- and middle-income borrowers.
Find all the plan details and how to sign up for notification of the official plan opening: click here.
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