Student loan debt continues to be a burden for many borrowers who sought out a college degree. Whether they got that degree or not, many former students have mountains of debt with no relief from higher paying jobs in sight. Combined with the growing costs of a 4-year degree and rapidly increasing cost of living, having debt like this can significantly hinder your financial freedom. Things like buying a house or saving for retirement seem impossible for many borrowers. But the Biden administration has put in place a three part plan to give relief to borrowers.

What is Student Loan Forgiveness?

In late August, the White House announced $10,000 of debt relief to student borrowers, and $20,000 to Pell Grant recipients. If your individual income is less than $125,000 per year (or $250,000 if married) then you qualify for student loan forgiveness. This is an extremely helpful measure for middle- and low-income families and individuals with student debt.

The Biden administration did not stop there. Reforms for the current loan system are under way as well. The first target is attempting to cut current payments in half with income driven payment plans. And an attempt to fix the Public Service Loan Forgiveness program, that allows certain fields forgiveness for their loans as well. This plan also aims to help future borrowers, by trying to reduce the cost of college and holding universities accountable when they increase prices. 

These are great steps in the right direction, but so much more work is to be done to make a college degree accessible to all Americans. While $10,000 may not be your full student loan amount, there is no denying this measure is helpful to anyone with debt. Check it out here to see if you qualify, and talk to your financial advisor today to restructure your budget to accommodate these new savings.