Yesterday, President Joseph R. Biden Jr. announced a student loan relief plan for federal student loan borrowers.
Through the plan, individuals earning less than $125,000 a year are eligible to have up to $10,000 of student debt canceled, according to a statement from the White House.
For individuals who meet these income requirements and received a Pell Grant in college, up to $20,000 of student debt can be canceled.
Federal student loans require borrowers to pay 10 percent of their discretionary income for each monthly payment, according to the statement.
This plan reduces that percentage to 5 percent and raises the amount of income that is considered non-discretionary.
For borrowers with original student loans of $12,000 or less, the plan forgives loans after 10 years of payments, rather than 20 years. The plan also covers borrowers' unpaid monthly interest, according to the statement.
Additionally, the plan attempts to reform the Public Service Loan Forgiveness program by allowing borrowers who have worked at a nonprofit, in the military or in government to have their federal student loans forgiven after 120 payments, but individuals must apply to the program before October 31 to be eligible for these benefits.
The plan also extends the pause on federal student loan repayment for a final time until Dec. 31, 2022, according to the statement.
"I believe my plan is responsible and fair. It focuses the benefit on middle-class and working families," Biden said in his statement yesterday. "It helps both current and future borrowers. And it will fix a badly broken system."