Paying off student loans has been an ongoing problem for the working class, but finally, needed changes are being made. On August 24, Joe Biden announced his loan debt forgiveness plan, which will drastically help Americans that are eligible.
“Education is a ticket to a better life,” Joe Biden said in his speech announcing his loan debt forgiveness plan.
Biden emphasized that a college education is very important for living a comfortable life, while acknowledging that many Americans cannot afford this due to the extreme cost of going through with a higher education. Many have had to put off their education and a third of borrowers have both debt and no degree, making the idea of an education completely out for the question. The pandemic did not make this case easier, leaving Americans in more debt than ever before. With that, Biden proposed a plan for those who have been hit hard by these events and others.
Who is eligible?
As for who will receive these benefits, it is limited to borrowers who make less than $125,000 per year, or married couples or heads of households that earn less than $250,000. According to Biden, about 90% of the eligible beneficiaries make under $75,000 per family, so this plan will greatly benefit them. Overall, 43 million people could benefit from this plan and have the weight of paying off inevitable debt taken off their shoulders.
What will be received?
For most borrowers, $10,000 in outstanding student loans will be forgiven. People who are recipients of a Pell Grant will have their debt reduced by $20,000. No high income individuals or households will be eligible for this forgiveness plan and the aim is to help those who need the forgiveness most.
The payment pause
Along with Biden’s student loan forgiveness plan, he is also extending the payment pause on federal student loans until Dec. 31. Payments will start up again in January.
How to apply for loan forgiveness
In coming weeks, the Department of Education will give out details in a short and simple form with information of when this application process will open and begin. Other than that, there is not much information on the the application process.
Needless to say, this policy will be a game changer for those who have been struggling to pay off their education. Many lower income household will benefit from this plan.