The White House announced via tweet today its much anticipated package of student loan relief:
- Current pause in student loan payments is extended to Dec 31, 2022
- New rules will allow Income Based Repayment (IBR) at only 5% of income (currently 10%)
- Students making less than $125K a year can get student loan forgiveness of $10,000 of student loan debt, ($20,000 if you received Pell grants*)
- Pell grants are typically forgiven. They are not loans. The maximum Pell Grant award for 2021-2022 is $6,495 and the minimum is $650. The maximum EFC (expected family contribution)a student can have and still qualify for a Pell Grant award is $5,846.
- The new loan forgiveness provisions apply to student loans that were taken in addition to the Pell Grant, not the Pell Grant itself.
Pause in Student Loan payments extended till Dec, 31, 2022
This was not unexpected, given that the midterm elections are coming up in November, and it was considered politically unwise to restart student loan payments right before the election.