WASHINGTON, D.C.—The Council for Opportunity in Education applauds the Biden Administration’s plan to forgive up to $20,000 of federal student loan debt. According to the plan, eligible borrowers include individuals making less than $125,000 or couples filing together making less than $250,000.
“This announcement by President Biden is a step in the right direction, highlighting the need for high-quality, affordable education,” said COE President Maureen Hoyler. “This forgiveness benefits many but particularly impacts those college graduates from low-income families working to build assets and those who were unable to complete their education, many of whom are low-income, first-generation students.”
Pell Grant recipients making less than $125,000 annually are eligible for a total of $20,000 in loan forgiveness. Individuals who did not receive Pell Grants and earn less than $125,000 are qualified for $10,000 in loan forgiveness.
Additionally, the plan extends the federal student loan payment moratorium one final time through December 31, 2022, and caps income-driven repayment on undergraduate loans at 5% of monthly income.
New data in the Indicators of Higher Education Equity in the United States: 2022 Historical Trend Report show student debt is soaring. According to the Pell Institute for the Study of Opportunities in Higher Education, in 2021, 43 million people had student debt, amounting to $1.75 trillion, up from $330 billion in 2003.
“Rising income and wealth inequality in the United States and the increasing cost of higher education threaten college access and students’ career pathways. Too many college students, especially students of color, struggle with high student debt and limited family resources that must be addressed through asset-based solutions,” said Terry Vaughan III, Ph.D., director of the Pell Institute and one of the report’s authors.
In the coming weeks, the Department of Education will announce additional details regarding this plan and information on forgiveness claims. For the latest research on systemic equity issues in postsecondary education, visit pellinstitute.org.