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Student Loan Debt Relief

On August 24, 2022, President Biden announced a three-part plan to provide student loan relief. Forty-five (45) million borrowers have federal student loan debt totaling $1.6 trillion. Planning for the entirety of college expenses is an important factor in completing your college degree, and student loans can become a significant financial burden. Below, we've summarized the three relief provisions to help you understand how you can benefit.

Part 1: Debt Relief

The Department of Education will provide the following debt relief based on qualifying income levels:

Debt ReliefIncome Limits
Pell Grant Recipients with Department of Education Loans$20,000

Single, less than $125,000 in income

Married, less than $250,000 in income

Non-Pell Grant Recipients with Department of Education Loans$10,000

Single, less than $125,000 in income

Married, less than $250,000 in income

It’s important to note that the American Rescue Plan exempts the debt relief from taxation through the end of 2025.

Part 2: Relaxed Repayment Plans

The plan is to cut monthly payments in half for undergraduate loans utilizing an income-driven repayment plan capping the monthly payment to 5% of a borrower’s discretionary income. This is about half the rate that borrowers must pay now under most plans.

For Public Service Employees, the plan is to create a rule for individuals who have worked in nonprofit, military service, federal, state, tribal, or local government to receive appropriate credit for their service and related loan forgiveness.

Part 3: Protecting Future Students and Taxpayers

The plan is to reduce the cost of college and hold schools accountable when they increase tuition prices. Controlling the increasing cost of a college education is of critical importance to the financial health and career success of future students. If you would like to speak with a Financial Advisor about college planning funding, please contact us.

More detailed information about the Student Loan Debt Relief plan can be found here: White House Fact Sheet on Student Loan Relief