The U.S. Department of Education on Aug. 24 announced it has extended the pause on repayment of student loans through Dec. 31, with payments resuming in January 2023.
Also under the plan, the administration will cancel up to $20,000 in debt for Pell Grant recipients with loans held by the Department of Education and up to $10,000 in debt for other borrowers. Borrowers are eligible for debt cancellation if their income is less than $125,000 for individuals or less than $250,000 for households.
The administration will provide more details regarding student debt relief as well as an application in the coming weeks.
As the third part of the plan, the Department of Education will propose a rule to create a new income-driven repayment plan that would, among other things, forgive loan balances after 10 years of payments, instead of 20 years, for borrowers with loan balances of $12,000 or less.
A fact sheet about the administration’s plan is available from the Federal Student Aid office of the Department of Education. Sign up for updates for borrowers of federal student loans here, including being notified when the application for debt cancellation is open.