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After President Biden’s announcement of his plans to forgive up to $20,000 in student loan debt, millions of Americans are wondering how and when to access the relief. Here’s what we know so far.
On August 24, Biden announced he would cancel $10,000 in student loan debt for borrowers earning up to $125,000 and an additional $10,000 for borrowers who received a federal Pell grant when they attended college. Parent PLUS loans also remain eligible for forgiveness, an unprecedented move. Private loans, however, aren’t eligible.
While the relief helps over 40 million Americans, the targeted plan will disproportionately aid Black and Latino borrowers, who are more likely to need Pell grants to attend college and who are more likely to require student loans to attend college.
Meanwhile, the Biden administration has said applications to apply for the debt relief won’t be available until early October, WFAA in Dallas reported.
Applications for student loan debt forgiveness to open in the fall
Bharat Ramamurti is deputy director of the National Economic Council for the White House. He confirmed last Friday that applications will open in early October and that borrowers can expect to see adjustments to their loan amounts four to six weeks after completing the application.
“Our estimate is that the debt relief proposal will reduce average annual receipts in the student loan program by about $24 billion a year over the next 10 years,” Ramamurti said after the announcement.
Since the pandemic, both former twice-impeached President Donald Trump and President Biden have paused loan payments a total of six times. The latest and last pause will end on Dec. 31, 2022.
In order to see your loans adjusted before the payment pause, the White House is encouraging borrowers to apply for student loan debt forgiveness by Nov. 15.