KNOXVILLE, Tenn. (WATE) — President Joe Biden announced the Department of Education will forgive tens of thousands of dollars in federal student loan debt for millions of people.

Below are some of the qualifications.

  • Only people who have federal student loan debt are eligible; private loan holders are not.
  • If you individually earned less than $125,000 per year in the 2020 or 2021 tax year (or $250,000 for married couples), up to $10,000 of student loan debt will be forgiven.
  • People within the same eligibility criteria who received a Pell Grant are eligible for $20,000 in student loan forgiveness.

The Department of Education will release information on how to sign up for student loan forgiveness in the coming weeks.

Nearly 8 million borrowers, whose income information the department already has on file, will be automatically enrolled in relief. Everyone else needs to fill out an application that is expected to be available by October. People are encouraged to head to studentaid.gov to submit their email addresses so once the application is available they would be notified.

For those who have worked for a government agency or a non-profit organization, they could be eligible for the Public Service Loan Forgiveness Program. The waiver for that program could allow borrowers to receive credit for past periods of repayment. There is a deadline for the end of October for that waiver.

Students taking out loans currently will not be eligible for cancellation under this plan. However, President Biden has proposed changes to income-driven repayment plans that could cut monthly payments to half of what they are now for lower-income borrowers, with any remaining balance forgiven after 10 years.

Celeste Carruthers with the Haslam College of Business at the University of Tennessee also spoke on the long-term impacts this can have.

“Those changes to income-driven repayment have an effect on and the decisions they’re making today about whether to go to college and where to go to college,” said Carruthers. “That could have follow on effects on the cost of college and enrollment.”

Carruthers noted this forgiveness plan and all its attachments could cost the U.S. economy $500 billion to a trillion dollars.

Also to be noted, the pause on federal student loan repayment was also extended once again through Dec. 31, 2022, but borrowers should expect to resume payments in January of the coming year.