The Biden Administration Extends Federal Student Loan Repayment; Cancels $10,000 In Student Loan Debt

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President Joe Biden is fulfilling a campaign promise that’s been on many voters minds as mid-terms approach. On Wednesday, Biden announced an extension to the COVID-era student loan pause to December 31st. The initial payment pause was supposed to end on August 31st. Biden also announced loan forgiveness of $10,000 for Federal Student Loans for individuals that make under $125,000 and $20,000 for Pell Grant recipients. The legislative action was authorized by the HEROES Act of 2003 which allows the Secretary of Education to waive/modify loans in the case of a national emergency. Congress holds the power to do a unilateral cancellation of federal student loans.

 UNCF reports that over 70% of HBCU students are Pell-Grant eligible, with black students making up 72% of Pell Grant recipients amongst all colleges. That number outpaces Asian students (36% of Pell Grant recipients) and white students (34%). Pell Grants is a type of need based financial aid that was established in the Higher Education Act of 1965, the same legislation that established the HBCU designation for institutions of higher learning established before 1964 that were created with the specific purpose of educating African-American students. The grant, named after chief sponsor of the program Sen. Claiborne Pell of Rhode Island, is the largest federal student loan assistance program offered by the US Department of Education to undergrad students. 

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Biden announced his intention to cancel up to $10,000 in Student Loan Debt during his campaign for President in 2020. Forbes reported on the declaration, which he made at an October 2020 NBC Town Hall with Lester Holt.

In response to a question from a young person concerned about student loan debt and a lack of economic opportunity, Biden responded, “You get all these degrees and you get all this debt, and you get in a position where you can’t get a job because no one is hiring, or they’re hiring at very low wages… I’m going to eliminate your student debt if you come from a family [making less] than $125,000 and went to a public university.” Biden also said, “I’m going to make sure everyone gets $10,000 knocked off of their student debt” in response to economic hardships caused by the pandemic.

Biden also rejected calls to increase the federal student loan forgiveness to $50,000 per borrower at a February 2021 town hall with CNN, one of his first as President of the United States.

 

 

 

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