President Joe Biden 

announces the cancellation of $10,000 federal student loan debt to each borrower who has an income limit of $125,000 

Federal Pell Grant recipients will have $20,000 of debt forgiven. This is a step to assist low-income borrowers.

More than two years ago, the then-presidential candidate Joe Biden, pledged to forgive at least $10,000 of federal student loans. The pledge has been a constant part of his administration ever since.

President on Wednesday also announced to pause all loan repayments until Dec.31, with repayments starting in January 2023.

Individual borrowers who earn less than $125,000 a year or less than $250,000 a year for couples are qualified for the $10,000 loan forgiveness.

According to the Department of Education, borrowers who are no longer in school, almost 90% of relief dollars will be paid to those earning less than $75,000 per year.

Approximately 43 million borrowers will be benefited and 20 million will see their debts completely forgiven and 60% of current federal student loan borrowers also received Pell Grants.

White Frame Corner
White Frame Corner

Under the proposed new income-driven repayment plan, the borrowers with loan balances of $12000 or less, would be forgiven after 10 years of payments rather than current 20 year mark.