Student Loan Forgiveness: What it Means for You
By: Taylor Lawson
August 25th, 2022
President Joe Biden announced a plan on Wednesday that will give many Americans some relief. The plan will forgive up to $20,000 of student loans and make the payback process for left over and future financial aid a bit easier to manage.
President Biden is offering up to $10,000 of loan forgiveness for those who did not receive a Pell Grant and $20,000 for those who did. In addition, he is continuing the pause on loan payments until December 31, 2022.
The forgiveness plan is for those who are making less than $125,000 annually as an individual and $250,000 as a married couple. It is designed to give some “breathing room” to middle-class Americans.
The president is also putting a new system on loan payment into action. For many borrowers, the forgiveness plan will not completely cover the cost that was originally borrowed. To ease this hardship, monthly payments will be cut in half for undergraduate loans.
Furthermore, the plan proposes to fix the faulty Public Service Loan Forgiveness program. It proposes to give appropriate loan forgiveness for those who have served in a nonprofit, in the military, or in federal, state, tribal, or local government.
Lastly, the plan will fight to make going to college cheaper by holding schools accountable for price changes. It will also fight to double the maximum Pell Grant amount and make community college free.
Current students are also eligible for forgiveness. If claimed as a dependent, the income will be based on the parent of the student’s income rather than his own.