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The Biden administration announced that it will cancel up to $20,000 worth of federal student loan debt per borrower. Additionally, the federal loan repayment pause will be extended until December 31, 2022.
According to the White House, the move will ease all student loan debt for roughly 20 million borrowers. To be eligible for debt cancellation, your annual income must be below $125,000 (for individuals) or $250,000 (for married couples or heads of households).
There are two types of student loan forgiveness you can qualify for:
- Up to $20,000 in debt cancellation: for those who received a Pell Grant in college and meet the income threshold.
- Up to $10,000 in debt cancellation: for those who did not receive a Pell Grant in college and meet the income threshold.
If you do not know whether you received a Pell Grant or not, you can log in to your studentaid.gov account to check. In your account, find the "my aid" button. In the "my aid" section, you will automatically be set to the "loans" tab. Click on the "grants" tab to see if you had any grants.
Unfortunately, the student debt relief announcement does not affect anyone with private student loans. Those with private student loans can consider refinancing them for a lower interest rate and better terms with SoFi or SuperMoney.