JACKSONVILLE, Fla. — If you owe student loans, some of that debt could be erased.
On Wednesday, President Biden announced a three part plan to help families with the costs of education. The Department of Education will provide up to $20,000 in debt relief to Pell Grant recipients and up to $10,000 to non-Pell grant recipients.
Borrowers are eligible if you make under $125,000 as an individual annually or $250,000 for married couples. The president also announced the pause on loan repayment will be extended for the last time through Dec. 31.
"I'm like wow it takes a lot of the burden away,” University of North Florida Graduate Student Caitlin Brock said.
University of North Florida students Caitlin Brock and Terry Wright say this is a relief.
“I think education should be free anyway, but that will be a big help to all of us,” Student Terry Wright said.
Biden says his plan focuses on working class families and makes college more affordable.
“Ninety-five percent of the borrowers can benefit from these actions,” Biden said. "That’s 43 million people. Of the 43 million, over 60% are Pell Grant recipients. That's 27 million people who will get $20,000 in debt relief. Nearly 45 percent can have their student debt fully canceled. That’s 20 million people who can get on with their live."
The plan is also designed to improve the student loan system by cutting monthly payments in half for undergraduate loans, proposing a rule to allow borrowers who worked in non-profits in the military, federal, state, or local government to receive credit towards loan forgiveness, and reducing the cost of college and holding schools accountable for raising prices.
So who will pay for it? According to the Budget Model, forgiving student loan debt will cost between $300 billion and $980 billion dollars over ten years.
“There is plenty of deficit reduction to pay for the programs many times over,” Biden said.
Borrowers have until at least January before payments resume, but First Coast Financial Group advisor Kyle Boston says it’s never too early to start planning ahead.
“It's probably been a couple years since you've even looked at it,” Financial Advisor Kyle Boston said. "Log into your loan servicer, go online, make sure that all your information is current, because they're probably going to want to contact you here pretty soon too."
The Department of Education is in the process of building an application process for borrowers to claim relief. That application will be available no later than the end of the year.