President Joe Biden announced his plan to address student loans on Wednesday
That includes loan waivers for some borrowers and the extension of pandemic-related payment breaks.
By expanding existing amnesty programs for public sector workers, disabled borrowers and students duped by for-profit colleges
The Biden administration has already cancelled nearly $32 billion of the $1.6 trillion in outstanding federal student loans.
The amount of the forgiven loan is determined by whether the borrower received a Pell grant to attend college.
According to the Federal Student Aid Office of the Department of Education, a federal Pell grant is awarded only to graduate students who "demonstrate exceptional financial need.
And do not earn undergraduate, graduate, or professional degrees" and "not to be changed, except under certain circumstances."
According to the FSA, individual borrowers earning less than $125,000 per year and married couples or heads of families earning less than $250,000 per year,
Up to $10,000 of their federal student loan debt may be forgiven if they did not receive a Pell grant as a graduate student.
Since the Department of Education already has their income information, approximately 8 million borrowers may be eligible for automatic loan forgiveness.
In the coming weeks, the Biden administration will launch an application for borrowers to provide information on their income or if borrowers are unsure.
Borrowers can sign up at studentaid.gov to be notified when applications are open.
According to the FSA, the application will be available before the federal student loan repayment break ends on December 31.
The student loan repayment period will be extended till December 31, 2022, with repayment commencing from January 2023.
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