Biden is canceling up to $10K in student loans, $20K for Pell Grant recipients

On Wednesday, President Biden announced a sweeping effort to forgive up to $20,000 of federal student loan debt for Pell Grant recipients, and up to $10,000 for other qualifying borrowers. Biden also extended the federal student loan payment pause through Dec. 31.

"In keeping with my campaign promise, my Administration is announcing a plan to give working and middle class families breathing room as they prepare to resume federal student loan payments in January 2023," Biden said in a tweet on Wednesday.

Updated August 24, 2022 at 12:18 PM ET

U.S. Secretary of Education Miguel Cardona said in a statement, "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."

To qualify for the $10,000 forgiveness, individual borrowers must earn less than $125,000 a year, or less than $250,000 a year for couples.To qualify for the $20,000 forgiveness, borrowers must meet those income requirements and must have received a Pell Grant in college. Pell Grants are designed to help low-income students pay for higher education. About a third of undergraduate federal student loan borrowers receive Pell Grants every year.

About 43 million borrowers will benefit, and 20 million will have their debt completely canceled, according to a senior administration official.

The Education Department said it will announce further details on how borrowers can claim this relief in the weeks ahead. [Copyright 2022 NPR]