Biden Administration Will Cancel Up to $20,000 in Student Debt for Borrowers Based on Income, Type of Grant

President Joe Biden announced his plan for forgiving student debt for some borrowers Wednesday.

via: People

On Wednesday, Biden announced that non-Pell Grant borrowers will have up to $10,000 in student loan debt canceled if they make less than $125,000 per year. Pell Grant recipients are eligible for up to $20,000 in cancelation if they meet the same income requirement.

Married couples must make less than $250,000 per year combined in order to qualify for loan forgiveness.

In announcing his plan, Biden also extended the student loan payment pause one final time to last through the end of the year, sharing that borrowers should expect to resume payments in January of 2023.

Ten to 20 grand is a far cry from the $50,000 in forgiveness — or total cancelation — that some had been pushing for, but a win for Americans nonetheless as millions have struggled to pay bills even in light of the student loan pause that began in March of 2020.

The idea to only offer student loan forgiveness to borrowers below a certain income level seems to try and make the plan more equitable by ensuring that the limited funding goes to those who need it most — though anyone surpassing the maximum salary threshold is sure to be displeased. Offering a larger amount to Pell Grant recipients is another way that the Biden administration aims to target those in greater financial need.

Student loan forgiveness was a major talking point among Democrats in the 2020 presidential primary, and following through on some form of debt cancellation has been viewed as a critical step for Biden to take in helping invigorate young voters ahead of the midterms and keep Democrats in control of Congress.

Now, Democrats will have to wait and see whether Biden’s choice to only offer 10 or 20 thousand dollars of forgiveness — a number far below the national student debt average — will be enough to make a dent in voter turnout.

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