Last week, the White House unveiled their plan to cancel a significant portion of student debt for millions of Americans. The Department of Education will:
- Provide up to $20,000 in debt cancellation to Pell Grant recipients with loans held by the Department of Education, and up to $10,000 in debt cancellation to non-Pell Grant recipients.
- Borrowers are eligible for this relief if their individual income is less than $125,000 ($250,000 for married couples). No high-income individual or high-income household – in the top 5% of incomes – will benefit from this action.
- To ensure a smooth transition to repayment and prevent unnecessary defaults, the pause on federal student loan repayment will be extended one final time through December 31, 2022. Borrowers should expect to resume payment in January 2023.
The Department of Education plans to release more details about the process for obtaining debt cancellation in the next few weeks. This debt cancellation program should help reduce financial burdens on many nonprofit employees and many Louisianians who receive services from nonprofits.