College classrooms around the country are celebrating as President Joe Biden announced Wednesday that current students will be eligible for $10,000 in federal student loan debt forgiveness.
Though specific details of the president’s broad loan forgiveness effort are not yet available, the White House said federal borrowers, including those currently attending school, will have up to $10,000 in debt forgiven if they meet certain income requirements.
Additionally, students who receive Federal Pell Grants as a part of their financial aid award will be eligible for up to $20,000 in relief. That aid is awarded to low to moderate-income students who show exceptional financial need.
Eligibility for students who are dependents will be based on their parents’ income. The eligibility cuts off at $125,000 in annual income for single parents and $250,000 for married couples and heads of household. For independent students, eligibility will be based on their own annual income in 2020 or 2021.
Nearly 8 million current borrowers may see loan relief automatically since “relevant income data is already available” to the U.S. Department of Education, but an application will also be accessible “no later” than the end of the year for all other borrowers.
In addition to debt relief, Biden announced that the federal payment pause will be extended for one last time, through December 31, 2022. Federal borrowers have not had to make any payments on their student loans since the start of the COVID-19 pandemic.
As it stands, Biden has only announced that current students are included in the federal loan relief, so prospective students should remain patient as more details on eligibility surface.
How will student loan forgiveness affect you and your finances? Please email reporter Alicia Adamczyk to be featured in a future article.