Biden Administration Announces Student Loan Forgiveness, Payment Suspension Plans
On Wednesday, the Biden administration announced its plan to address the burden of student loan debt on borrowers ahead of the anticipated expiration of the federal student loan payment and interest accrual pause on August 31. In response to persistent grassroots advocacy since the beginning of the COVID-19 pandemic, the White House announced its intent to cancel up to $10,000 in outstanding debt for non-Pell Grant recipient borrowers, and up to $20,000 for Pell Grant recipients, with an annual individual income of less than $125,000 or household income of $250,000. The White House further announced the extension of the moratorium on loan payments and interest accrual through the end of 2022, providing further financial relief.
While the Department of Education will automatically forgive outstanding debt for borrowers with income data it already possesses, most borrowers will need to complete a forthcoming application to certify their eligibility for forgiveness. Borrowers can sign up to be notified when the Department of Education has released its application platform, which is expected to roll out prior to December 31.
In March, PAEA joined with a coalition of over 200 federal and state advocacy organizations to call on the Biden administration to extend the moratorium on student loan payments and interest accrual until a plan could be finalized to ensure widespread debt relief. This action followed the amendment of PAEA’s advocacy agenda by the Government Relations Steering Committee in 2021, directing Government Relations staff to “ensure any federal student loan debt cancellation measure does not exclude PA students, faculty, and graduates.”
While implementation of the administration’s policy will begin immediately, opponents of broad-based student debt cancellation have signaled their intent to pursue legal challenges to halt this process. As developments emerge, PAEA’s Government Relations team will continue to advocate in support of debt relief and provide pertinent updates to members.
Members with questions regarding the Biden administration’s student loan announcement are invited to contact Tyler Smith at tsmith@PAEAonline.org.
