How to qualify for Biden’s new student loan forgiveness plan
By Chandelis Duster, CNN
President Joe Biden on Wednesday announced his plan to address student loan debt, which includes debt forgiveness for certain borrowers and extending the pandemic-related payment pause.
The Biden administration has already canceled nearly $32 billion of the $1.6 trillion in outstanding federal student debt by expanding existing forgiveness programs for public-sector workers, disabled borrowers and students who were defrauded by for-profit colleges.
Here are details CNN has learned of Biden’s new plan, including how much will be forgiven and who is eligible.
Who qualifies?
The plan applies to federal student loan borrowers.
How much forgiveness will they get?
The amount of debt canceled depends on whether the borrower received a Pell grant to attend college. A federal Pell grant is only given to undergraduate students who “display exceptional financial need and have not earned a bachelor’s, graduate, or professional degree” and “does not have to be repaid, except under certain circumstances,” according to the Department of Education’s Federal Student Aid office.
Individual borrowers who make less than $125,000 yearly and married couples or heads of households who make less than $250,000 yearly will have up $10,000 of their federal student loan debt forgiven if they did not receive a Pell grant as an undergraduate student, per the FSA website.
Individual borrowers who make less than $125,000 yearly and married couples or heads of households who make less than $250,000 yearly but did receive a Pell grant as an undergraduate student will have up $20,000 of their student loan debt forgiven.
What steps do eligible borrowers have to take?
Nearly 8 million borrowers may be able to receive debt forgiveness automatically because the Department of Education already has their income information, FSA says.
The Biden administration will launch an application in the coming weeks for borrowers to provide their income information or if borrowers are unsure if the department has their income information already. FSA says the application will be available before the federal student loan repayment pause ends on December 31.
Borrowers can sign up for updates on when the application is open at the Department of Education’s subscriptions page.
Borrowers can also check the FSA website: https://studentaid.gov/.
The-CNN-Wire
™ & © 2022 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.
CNN’s Katie Lobosco contributed to this report.
