After months of anticipation, President Biden announced a final extension of the pause on student loan repayments and a one-time debt cancellation for undergraduate and graduate student borrowers. The final pause on student loan repayments, interest, and collections will extend through December 31, 2022.
On August 24, the Biden Administration announced and laid-out its plan to cancel up to $20,000 in debt for Pell Grant recipients with loans held by the Department of Education, and up to $10,000 in debt cancellation for non-Pell Grant recipients. Borrowers are eligible for this relief if their individual income is less than $125,000 or $250,000 for married couples or heads of household. The plan includes up to $10,000 in debt cancellation for graduate student loan debt, Graduate PLUS, and Parent PLUS loans. The plan also includes the creation of a new income-driven repayment plan that would cut in half – from 10 percent to 5 percent of discretionary income – that borrowers may pay on their undergraduate loans. Borrowers with both undergraduate and graduate loans will pay a weighted average rate. More details about the new IDR plan and the broader debt relief plan will be forthcoming in the weeks ahead.
“A graduate degree can open doors to economic prosperity and help propel individuals into the middle class,” Suzanne T. Ortega, president of CGS said in a statement. “Student loan debt shouldn’t be a burden on students or parents who may not have a financial safety net during the pandemic crisis.”
A Education Department press release on the plan can be found here, as well as the legal memo regarding its authority for student loan relief. President’s Biden’s speech regarding the student loan debt relief plan can be found here.