President Joe Biden is seeing the fruits of his labor, which culminated with the announcement of student loan relief last month. Millions of Americans with debt in student loans will receive up to $20,000 in relief in some cases. Pell Grant recipients are eligible to apply for this exemption.
A total of about 8 million people are getting automatic debt relief under this new government loan scheme. This information is coming straight from the White House. Most Americans who have federal loans will be eligible for up to $10,000 in cancellations. But there’s an even better deal for those with Pell Grants, which are typically awarded to low-income students.
How much does a Pell Grant recipient earn?
To be eligible for this relief, alumni who receive Pell grants must make no more than $125,000 per year, or $250,000 for married couples. If that’s the case, they’re getting a full $20,000 discount.
According to CNBC, bank accounts of borrowers may get canceled in the next six weeks. There are some borrowers who are eligible to have their loan canceled automatically, but they can save even more money if they fill out the application anyway.
How does automatic cancellation work?
Those who wish to apply for automatic cancellation of their loan must provide their income data to the US Department of Education. They plan to use this data from the Free Application for Federal Student Aid (FAFSA) and income-driven repayment plans to verify income data for some borrowers. These cancellations will be based on the lowest income from the 2020 and 2021 tax years.