Yesterday, the Biden-Harris administration announced sweeping loan forgiveness for federal student loan borrowers. This unprecedented program will allow up to $20,000 of loan forgiveness based on income levels and financial need. Specifically, households with an individual income of less than $125,000 or a household income of $250,000 will get $10,000 in debt cancellation. Borrowers who received Pell Grants while in college will get $20,000 in loan forgiveness.
However, there’s a lot more than blanket loan forgiveness in this initiative. In fact, this announcement (see the full press release from the Department of Education here) covers three separate programs: blanket loan forgiveness, a new income-based repayment plan, and an extension of the payments and interest pause to the end of the year. I will cover each of these programs in depth through blog posts at gradmetrics.com.
Many clients have questions about how this program will be administered and what action they need to take. Unfortunately, there’s still a lot up in the air at this point. I would anticipate more details in the months ahead as the Department of Education figures out the details and releases the appropriate applications. Make sure to check back regularly as we will update our blog.
To learn more about Biden’s blanket loan forgiveness plan, visit this website.