President Joe Biden announced Wednesday that the U.S. government will forgive federal student loan debt of up to $10,000 for individuals that make less than $125,000 a year.
Recipients of federal Pell Grants that who also meet the income requirements can have up to $20,000 of their debt forgiven.
The White House said information on how to claim relief will be announced in the coming weeks and people can sign up to be notified of more information at StudentAid.gov/debtrelief.
The debt forgiveness program is part of a three-part plan, which the White House said is aimed to help individuals and families continue to recover from the effects of the COVID-19 pandemic, the White House said. The other two parts of the program are intended to help make the cost of attending college manageable going forward.
In addition to forgiving some student debt, Biden’s plan will also cut the monthly repayment rate of federal loans in half. The Department of Education’s proposed rate caps monthly payments at 5% of an individual's discretionary income, while current rates can be up to 10-15%.
Biden also extended the pause of federal student loan repayment through Dec. 31, 2022.
The plan will also aim to keep college tuition at a reasonable rate by having the Department of Education keep an annual public list of programs with the highest levels of student debt and request action plans to address those issues from the institutions.
