September 07, 2022
Page 9
Student Loan Forgiveness Plan
President Joe Biden speaks about student loan debt forgiveness in the Roosevelt Room of the White House, Wednesday, Aug. 24, 2022, in Washington. (AP
Photo/Evan Vucci)
Biden plan
on debt
forgiveness
(AP) — More than 40 million Amer-
icans could see their student loan debt
reduced — and in many cases eliminated
— under the long-awaited forgiveness plan
President Joe Biden announced Wednes-
day, a historic but politically divisive move
in the run-up to the midterm elections.
Fulfilling a campaign promise, Biden
is erasing $10,000 in federal student
loan debt for those with incomes below
$125,000 a year, or households that earn
less than $250,000. He’s canceling an ad-
ditional $10,000 for those who received
federal Pell Grants to attend college.
It’s seen as an unprecedented attempt
to stem the tide of America’s rapidly ris-
ing student debt, but it doesn’t address
the broader issue — the high cost of col-
lege. Republicans quickly denounced the
plan as an insult to Americans who have
repaid their debt and to those who didn’t
attend college. Critics across the political
spectrum also questioned whether Biden
has authority for the move, and legal
challenges are virtually certain.
Biden also extended a pause on federal
student loan payments for what he called
the “final time.” The pause is now set
to run through the end of the year, with
repayments to restart in January “Both
of these targeted actions are for fami-
lies who need it the most: working and
middle-class people hit especially hard
during the pandemic,” Biden said at the
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White House on Wednesday afternoon.
The cancellation applies to federal stu-
dent loans used to attend undergraduate
and graduate school, along with Parent
Plus loans. Current college students qualify
if their loans were issued before July 1. For
dependent students, their parents’ house-
hold income must be below $250,000.
Most people will need to apply for the
relief. The Education Department has in-
come data for a small share of borrowers,
but the vast majority will need to prove
their incomes through an application
process. Officials said applications will
be available before the end of the year.