Joe Biden's student loan waiver explained: How to apply, who is eligible and more

United States President Joe Biden on Wednesday announced that his administration will forgive student loans of up to $20,000 for those falling into a certain income bracket. The debt forgiveness will apply only to those who make less than $125,000 a year. Joe Biden's tweet said the payment freeze will be extended one last time, until 31 December.

United States President Joe Biden on Wednesday announced that up to $10,000 in federal student loan debt can be forgiven for many Americans and it can go up to $20,000 in case they went to college on Pell grants. The declaration comes over halfway through Biden's presidency, during which time the progressive flank of the Democratic Party has relentlessly pressed him to waive student loan debt.

What is the student plan?
The three-part strategy aims to assist middle-class and working-class federal student loan debtors "transition back to normal payment" once pandemic-related assistance from the US government ends. According to a US government website, "This proposal involves loan forgiveness of up to $20,000."

What happens once payments resume?
For debtors who are most likely to fail, the US Department of Education will offer debt cancellation. Pell Grant holders can get up to $20,000 in this offer, while everyone else can receive up to $10,000. 

Who qualifies for the student loan forgiveness?
According to a government announcement, anyone who make less than $125,000 will be eligible for loan forgiveness. Additionally, those who obtained the loan through federal student loan programmes are likely qualified for it, although those who obtained private loans from banks or educational institutions are unlikely to be.

For individuals who qualify, the administration intends to forgive up to $10,000 in federal student loan debt. Up to $20,000 can be forgiven for those who received Pell Grants, which are granted to undergraduates with the greatest financial need.

How many people will benefit from the plan?
According to income data available with the the US Department of Education, nearly 80 lakh borrowers stand to benefit.

Will loan cancellation be applicable for those who have paid fees?
No. The loan forgiveness will only be available to people who have school debt at the moment. The Federal Office of Student Aid advises that you can ask for a refund for any payments you made willingly after payments were suspended in March 2020. To ask for a refund, get in touch with your loan servicer.

How can one apply for the student loan forgiveness?
Although specifics have not yet been released, keep a watch on the federal student assistance website in the coming days for further information.