- On Wednesday, President Joe Biden announced long-awaited student loan debt cancellation.
- Some borrowers will see $10,000 in loans relieved — but not everyone is eligible for cancellation.
- Borrowers must make below $125,000, hold federal loans, and have undergraduate debt.
President Joe Biden has finally announced that his administration will cancel $10,000 in student loan debt, fulfilling a long-awaited campaign promise.
The president's announcement came on Wednesday, days before student loan payments were meant to restart. It's a historic moment for borrowers and the federal government. While the Biden administration has relieved $10 billion in debt for public servants, and forgiven billions for students who attended for-profit colleges, this is its first foray into broad student loan relief.
"Today, we're delivering targeted relief that will help ensure borrowers are not placed in a worse position financially because of the pandemic, and restore trust in a system that should be creating opportunity, not a debt trap, " Secretary of Education Miguel Cardona said in a statement.
But not everyone is eligible.
Up to 8 million borrowers could see automatic relief, according to the Biden administration, and an application to apply for relief will open "in the coming weeks."
Here's how to know if you're eligible
To qualify, borrowers must:
- Make below $125,000 annually
- Or, if filing taxes as a married couple, make below $250,000 jointly
- Hold federal loans
- Hold undergraduate debt
Biden said he will release more details on cancellation and relief on Wednesday afternoon.
Pell Grant recipients will get even more relief
Borrowers who have Pell Grants — which are traditionally awarded to students with larger financial need — will see $20,000 of debt relieved. Those borrowers must also earn below $125,000 annually, or $250,000 jointly.
Some say the relief isn't broad enough
For months, some progressives and organizations have been pushing for broader and larger forgiveness. The Washington Post's Jeff Stein and Danielle Douglas-Gabriel reported that, in the week before the president's announcement, Senate Majority Leader Chuck Schumer and Senator Elizabeth Warren made a last-ditch effort to push for larger relief. Schumer reiterated that call on Tuesday night, per a Democrat familiar.
Progressives have continually pushed for more expansive relief. Senator Bernie Sanders has called for all student loan debt to be forgiven, and Rep. Alexandria Ocasio-Cortez has said a "halfway approach" to forgiveness is a "waste."
But Biden swatted down forgiving $50,000 for borrowers months ago, opting instead for the option that's likely to cost the government the least. The NAACP has continued to push for at least $50,000 to be relieved per borrower, citing cancellation and uneven student debt loads as an issue of equity.
"Biden must recognize and regard student debt as a racial and economic justice issue," NAACP President Derrick Johnson and NAACP director of youth and college Wisdom Cole wrote in a Wednesday CNN op-ed. "Canceling $50,000 or more per borrower would free millions of Americans, allowing them to become more active participants in the US economy. It would also drastically reduce the racial wealth gap."
Cancelling $10,000 "would do little to help," they wrote.
