The President Announces Student Loan Debt Forgiveness—What Does It Do?

Here are the details concerning the forgiveness of student loan debt. It will:

• Provide up to $20,000 in debt cancellation to Pell Grant recipients and up to $10,000 in debt cancellation to non-Pell Grant recipients. Borrowers who earn less than $125,000 per year or households earning less than $250,000 are eligible for debt cancellation.
• Extend the federal student loan pause a final time through December 31, 2022 to provide borrowers a smooth transition back to repayment.
• Make the student loan system more manageable for current and future borrowers by cutting monthly payments in half for undergraduate loans and holding schools accountable when they hike up prices.

These actions will help borrowers who need it most – with nearly 90% of relief dollars going to borrowers earning less than $75,000 per year. These actions build on the steps that the Biden-Harris Administration has already taken to provide over $32 billion in loan relief to 1.6 million borrowers.