On Aug. 24, President Joe Biden was set to announce his highly-anticipated promise to cancel student debt. All eyes were on Mr. Biden’s alleged plan to cancel student loans – except it didn’t turn out that way. The Biden Administration’s Student Loan Relief announcement ended up being a strategy not to cancel the loans, but rather to combat them.
Today, we’re meeting my campaign commitment with targeted debt relief to folks from families who need it most.
If you received a Pell Grant while in college and make less than $125,000 a year, you are eligible for up to $20,000 in debt reduction. pic.twitter.com/1soacSBajg
— Joe Biden (@JoeBiden) August 24, 2022
The forgiving grant resulted in $20,000 if you went to college with Pell Grants and $10,000 if you didn’t receive any. However, it only applies to those individuals who earn less than $125,000 of income. Another point made is that the student loans will pause for a final extension until December 31, 2022. Future payments will then be based on income: If you have undergraduate loans, you can cap repayment at 5 percent of your monthly income, based on the information that government officials are circulating online.
According to Education Data, 67 percent of Hispanic and Latino student borrowers have educational debt. So, to understand more about how this will impact Latinos and people of color, BELatina News spoke with the White House Higher Education Policy Adviser, Katherine Valle.
Here’s a recap of what was announced yesterday, and the highlights from BELatina News’ conversation with Valle on the topic.
What was the Student Loan Relief Announcement about?
“Today, we’re meeting my campaign commitment with targeted debt relief to folks from families who need it most,” President Joe Biden wrote on his social media. “If you received a Pell Grant while in college and make less than $125,000 a year, you are eligible for up to $20,000 in debt reduction.”
“I will never apologize for helping working Americans and the middle-class,” he posted in a second tweet.
While the relief will help many – it’s projected to help 43 million eligible scholars – it still comes short of his promises of canceling everyone’s debt.
“We project that up to 43 million people will be eligible for debt cancellation and up to 20 million people will be eligible to have all of their student debt fully canceled. This is going to impact 95 percent of the people who have these student debts,” Katherine Valle, the White House Higher Education Policy Adviser told BELatina News.
“In addition to that, the President also announced changes so that when people are paying off their student debt, the monthly payment will not be as much. People will be able to have a monthly payment that will be half of the monthly payment they are paying now.”
When asked about further plans for students who will take out loans in the future, Valle continued by saying that the President also increased the Pell Grant by $400, compared to last year’s amount. She also pointed out that he’s halting payments until December 31, 2022.
How do we know if we’re eligible?
Valle encouraged students to check out StudentAid.Org and to submit their email addresses to the Department of Education; they can start the application process in a few weeks.
But how do you know if you’re automatically eligible or not?
“The Department of Education will release more information on this in the coming weeks. Some loan holders will be able to receive debt cancellation automatically because the Department of Education already has access to income information for these individuals. Others will have to fill out an application,” Valle said.
To wrap up the conversation, Valle said: “We need everybody to help spread the word to their families. Tell your uncles, your nephews, your nieces, your neighbors, whoever else so that we make sure everybody knows about these benefits.”
Where can I get more information?
The fact sheet is live on The White House’s official website for those who want more details on the Student Loan Relief announcement.