On August 24, President Biden announced during a White House Press conference his administration’s plan to tackle student debt. Collaboration between the presidential branch and the U.S. Department of Education has led to a three-part program called the Biden-Harris Administration’s Student Debt Relief, which aims to end and/or relieve Americans of their student debt.
That same day, the White House published an official statement explaining the reasoning behind the administration’s decision to help borrowers.
“During the campaign, [President Biden] promised to provide student debt relief,” the statement read. “Today, the Biden Administration is following through on that promise and providing families breathing room as they prepare to start repaying loans after the economic crisis brought on by the pandemic.”
The White House’s statement also explained that the plan is meant to help Americans transition back into regular monthly payments. The first part of the relief program is currently taking place. Student loan payments have been paused since March 13, 2020, and the Biden Administration extended the payment suspension until January of 2023.
The second part of the plan will be provided by the U.S. Department of Education as it grants debt relief to borrowers. According to Federal Student Aid, only individuals who earn less than $125,000 or households that make less than $250,000 will benefit from the relief plan. Pell Grant recipients will be eligible to receive up to $20,000 in debt relief, while those who did not have Pell Grants will be eligible for up to $10,000.
In addition to that, the Public Service Loan Forgiveness program (PSLF) will be offering borrowers who work for the military, nonprofit organizations, tribal communities and local governments to be forgiven after making 120 qualifying monthly payments. However, borrowers must apply by Oct. 31 to apply for relief pay.
According to Federal Student Aid, the third part of the plan will aim to “make the student loan system more manageable for current and future borrowers.” This part of the policy will introduce a new repayment plan that will cut monthly payments in half for undergraduate loans, allow borrowers to gain debt forgiveness after 10 years, cover borrowers’ monthly interest and raise the amount of what is considered discretionary income, which ensures that those who are 225% under the federal poverty line will not be required to make monthly payments.
Amelia Davidson, sophomore psychobiology major, said of Biden in an email to the Accent, “I can’t believe he’s actually doing it, I sort of thought it was going to turn into a situation where he said he was going to, but never follow through. It sounds like it’s going to be really helpful for a lot of people.”
Those who would like to apply can go to the U.S. Department of Education’s subscription page from now until Dec. 31, 2023.
