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Student Loan Debt and How to Help

Written by Evan Yi, ELAP intern

Student debt is a major crisis for Americans, especially low-income people. Currently, 45 million Americans shoulder $1.7 trillion in student loans. Approximately one-third of borrowers default on their loans at some point. And 87% of Pell Grant recipients, who are lower-income borrowers, have defaulted at least once.

In response to the crisis, the federal government is making (and also considering more) big changes to the student loan debt and the student loan system.

Here are the changes that have already gone into effect:

  1. All students: The student loan pause is extended for the final time through Dec. 31, 2022.
  2. If you are a Pell Grant recipient: The Department of Education will provide up to $20,000 in debt cancellation if your income is less than $125,000 ($250,000 for married couples).
  3. If you are not a Pell Grant recipient: You still are eligible for up to $10,000 in debt cancellation if your income is less than $125,000 ($250,000 for married couples).
  4. If you have worked at a nonprofit, served in the military or worked for the federal, state, tribal, or local government: The Public Service Loan Forgiveness is changing and is available for a limited time only. If you have worked for any of the above for at least 10 years, the Department of Education has announced changes.  The changes will provide an easier path to forgiveness of all outstanding debt. If you have served less than 10 years, you may now get credit for your service more easily to get your debt forgiven eventually. This applies even if you have been previously told that you had the wrong loan type. You can use this simple online tool to determine your eligibility.

These changes will help but not fully alleviate the student loan debt problem. The Department of Education has proposed additional changes, including:

  1. New income-driven repayment plans
  2. Raising the amount of income considered non-discretionary
  3. Forgiving loan balances after 10 years of payments
  4. Covering borrowers’ unpaid monthly interest
  5. Making additional changes to the Public Service Loan Forgiveness

You can advocate for these changes to go into effect. Contact your senator and representative and express support for student loan debt relief. Learn more about the changes and additional proposed changes.



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