According to data released Sept. 20, over 40 million borrowers in the United States and its territories are eligible for student loan forgiveness. This includes 3.3 million Texas borrowers, roughly two-thirds of which are Pell Grant recipients. Pell Grants are typically given to low-income students.
To be eligible for debt cancellation, individual borrowers must have an annual income of below $125,000 or below $250,000 for married couples, the White House reported.
Relief is capped at a person’s amount of existing debt, according to the Federal Student Aid office. That said, someone who is eligible for a $10,000 reimbursement but only has $5,000 in remaining debt will receive $5,000.
Texas has the second-highest number of eligible borrowers, while California leads the way with 3.5 million eligible borrowers.
How to apply for student debt relief
The Department of Education will release an application to identify eligible borrowers in early October. After filling out the application, borrowers will receive relief in roughly four to six weeks, according to the FSA.
To be notified once the Department of Education releases the application, click here.
The FSA office encourages borrowers to apply before Nov. 15 to receive relief before the federal pause on student loan payments expires Dec. 31. Borrowers will be expected to resume payment of their student loans in January.
However, eligible borrowers can apply for debt forgiveness through Dec. 31, 2023.
Backlash against federal relief plan
On Sept. 12, governors from 22 states—including Texas Gov. Greg Abbott—signed a letter asking President Joe Biden to withdraw the student loan forgiveness plan.
The letter argues wealthy Americans will benefit most from the plan because “borrowers with the most debt, such as $50,000 or more, almost exclusively have graduate degrees, meaning hourly workers will pay off the master’s and doctorate degrees of high-salaried lawyers, doctors, and professors.”
However, most high-salaried people will not be eligible for debt forgiveness based on the income limit of $125,000 for individual borrowers.
According to the White House, the plan is expected to help borrowers recover from the pandemic as loan payments resume in January.
“Nearly 90% of relief dollars will go to those earning less than $75,000 per year—and no relief will go to any individual or household in the top 5% of incomes in the United States,” the Sept. 20 fact sheet said.
The White House reported 71% of Black students with undergraduate loans are also Pell Grant recipients as well as 65% of Latino students.
