President Biden forgives $10,000 in student loans

Up to $10,000 canceled for borrowers who earn $125,000 a year or less
Up to $20,000 canceled for Pell Grants recipients
Payment pause on federal student loans extended through Dec. 31

President Joe Biden announced his administration’s much-anticipated decision on student loan cancellation on Wednesday, cancelling up to $10,000 for borrowers. He also extended the COVID payment pause on debt to Dec. 31.

Up to $20,000 in Federal Pell Grants, usually awarded only to undergraduate students who display exceptional financial need and have not earned a bachelor’s, will also be forgiven.

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.

I'll have more details this afternoon. pic.twitter.com/kuZNqoMe4I
— President Biden (@POTUS) August 24, 2022

Loan repayment will be based on income, the president tweeted, with payments capped at 5% based on monthly income.

Biden is also deferring student loan repayments one last time, according to the Education Department who said this would be the last extension of the pandemic-related pause. They were due to resume Sept. 1.

The relief package will affect millions of Americans and comes before the midterm elections.

Learn more about the relief package here.