Individual borrowers who make less than $125,000 annually or households who make less than $250,000 annually will have up to $20,000 of their federal student loan debt forgiven, if they did receive a Pell Grant as an undergraduate student.

The student loan repayment pause will be extended through Dec. 31 and repayments will start in Jan. 2023. 

The Biden administration is also proposing a rule to create a new income-driven repayment plan in which borrowers pay no more than 5% of their monthly income on undergraduate loans, a decrease from the previous 10%. Loan balances will also be forgiven after 10 years of payments, a decrease from the current 20-year mark, for borrowers with loan balances of $12,000 or less. Furthermore, to help prevent a borrower’s loan balance from increasing while they are making payments, the new rule will cover unpaid monthly interest.

 After the initial announcement of the Student loan forgiveness a detailed report was released to explain specificities and questions loan holders may have regarding loan forgiveness. Click here for full details and frequently asked questions