The Biden-Harris administration has officially announced an income-based student loan debt repayment plan along with debt cancellation and forgiveness policies.

The announcement came from the U.S. Department of Education (DOE) earlier today on Aug. 24, which announced that student loan borrowers with an annual income below $125,000 who have also received a Pell grant for their college education qualify for up to $20,000 in debt cancellation. 

Borrowers who did not receive any Pell grants in college but still make less than $125,000 annually will qualify for up to $10,000 in debt cancellation.

The DOE also introduced a proposed income-driven payment plan for borrowers who will still have debt to pay, essentially calling for loan payments to be no more than 5% of the borrower’s discretionary income. This rule would also forgive loan balances after 10 years of payments.

U.S. Secretary of Education, Miguel Cardona, believes that these changes act as a step in the right direction for making higher education more accessible for everybody in the U.S. 

“Earning a college degree or certificate should give every person in America a leg up in securing a bright future,” Cardona said. “But for too many people, student loan debt has hindered their ability to achieve their dreams.”

Along with the cancellation policies, the DOE also announced that the COVID-19-caused student loan repayment pause would officially end on Dec. 31, 2022. All student loan debt repayment plans are expected to resume in Jan. 2023.

The removal of the pause comes from the consistently improving state of the U.S. economy according to the DOE.

The department will also propose changes to the Public Service Loan Forgiveness program that will make it less difficult for borrowers working in public service to receive loan forgiveness.

Along with these announcements, the Biden-Harris Administration will strive to double the maximum size of the Pell Grant.