Under the plan, the pause on student loan payments instituted in 2020 as a response to COVID-19 was extended through Dec. 31, 2022.
According to U.S. News data, student loan borrowers have an average debt of $30,000, which includes both federal and private loans.
With the Biden Administration and the United States Department of Education determined to move forward with the plan, here are some frequently asked questions.
Current students and borrowers with federally held undergraduate, graduate, and Parent PLUS loans distributed before June 30, 2022 are eligible.
Single borrowers earning less than $125,000 or households earning less than $250,000 can get $10,000 in loan forgiveness.
Borrowers who meet the income limits and received Pell Grants in college will receive an additional $10,000 in forgiveness, for a total of $20,000 in forgiveness.
Borrowers with Perkins loans or Federal Family Education Loans held commercially rather than by the Education Department are no longer included in the plan.
This could leave more than 4 million borrowers without relief, since they must have applied for a federal direct loan before Sept. 29, 2022, according to new guidance posted on StudentAid.gov.
In the original version of the plan, these borrowers had until the 31st of December, 2023 to consolidate their debt and submit their application for forgiveness.