President Joe Biden announced in a press conference on August 24 that the Department of Education will provide up to $20,000 in debt cancellation to Pell Grant recipients with loans held by the Department of Education, and up to $10,000 in debt cancellation to non-Pell Grant recipients.
According to the fact sheet provided by the White House, borrowers are eligible for this relief if their individual income is less than $125,000 ($250,000 for married couples). No high-income individual or high-income household – in the top 5% of incomes – will benefit from this action.
To ensure a smooth transition to repayment and prevent unnecessary defaults, the pause on federal student loan repayment will be extended one final time through Dec. 31, 2022. Borrowers should expect to resume payment in January 2023.
Pell Grant recipients are more than 60% of the borrower population. The Department of Education estimates that roughly 27 million borrowers will be eligible to receive up to $20,000 in relief, helping these borrowers meet their economic potential and avoid economic harm from the COVID-19 pandemic.
Currently, New Mexico ranks 25th out of all 51 states(including DC) for highest loan debt amounts. The average student loan debt (all years) amount here is around $34,000. In 2022, $7.8 billion in student loan debt belongs to state residents.
According to the fact sheet, since 1980, the total cost of both four-year public and four-year private college has nearly tripled, even after accounting for inflation.
Federal support has not kept up: Pell Grants once covered nearly 80 percent of the cost of a four-year public college degree for students from working families, but now only cover a third.
According to a Department of Education analysis, the typical undergraduate student with loans now graduates with nearly $25,000 in debt.