By now, you have most likely heard about the announced three-part plan to help working and middle-class federal student loan borrowers.

Are you confused by the myriad of information you’ve seen? Then let’s go over some details.

The Facts on the three-part plan:

  • The loan repayment pause has been extended until 31 December 2022, this will be the final pause.
  • The plan will forgive up to $20,000 in student loans to Pell Grant recipients, and up to $10,000 for non-Pell Grant recipients.
  • To be eligible for the loan forgiveness, annual income must be below $125,000 for individuals and below $250,000 for married couples or heads of households.
  • The proposed would require borrowers to pay no more than 5% of their discretionary income monthly, down from the previous 10%.
  • No borrower earning less than 225% of the federal poverty level will need to make payments (and no interest will be incurred for those individuals).

Did you know?

  • The average bachelor’s level graduate has student loan debts of $25,000
  • 35% of borrowers have less than $10,000 in student loans, which only accounts for 5% of the total student loan debt.
  • 6% of borrowers owe at least $100,000, which accounts for 33% of the total student loan debt (see graph below).
  • You don’t need a credit check or a cosigner to get most federal student loans.
  • Student debt has more than doubled since 2008.

Do you have student loans and would like to discuss your options? Click here to schedule a call with us.


The Biden-Harris Administration’s Student Debt Relief Plan Explained. The Biden-Harris Administration’s student debt relief plan explained. (n.d.).

Federal student loans for college or career school are an investment in your future. (n.d.).

The United States Government. (2022, August 24). Fact sheet: President Biden announces student loan relief for borrowers who need it most. The White House.

Yilla, K., & Wessel, D. (2022, March 9). Five facts about student loans.