National Association of Counties
On August 24, President Biden announced a plan to provide student debt relief for certain borrowers through the U.S. Department of Education (ED). Along with providing targeted one-time debt relief for low and middle-income households, ED will once more extend its current freeze on payments, collections on defaulted loans and interest accumulation on federal loans until December 31, 2022.
Citing the negative impact that federal student loan debt – which cumulatively amounts to $1.6 trillion dollars for more than 45 million borrowers – has on working families, the administration will apply the debt relief to households earning less than $125,000 ($250,000 for married couples). Pell Grant recipients with loans held by ED will see up to $20,000 in debt cancellation while non-Pell Grant recipients will receive up to $10,000 in debt cancellation. According to the White House, the action will provide relief to up to 43 million borrowers and cancel the full remaining balance for roughly 20 million borrowers.
Along with the action debt relief and the payment freeze extension, ED will be proposing a rule to implement a new income-driven repayment plan that would reduce the cap on monthly payments for undergraduate loans from 10 to 5 percent of a borrower’s discretionary income. This follows a package of proposed regulations issued in July that would alleviate student loan debt burdens for borrowers whose schools closed or lied to them, who are totally and permanently disabled, and for public service workers who have met their commitments under the Public Service Loan Forgiveness (PSLF) program, among other provisions aimed at improving student loan affordability. Those regulations build significantly on a temporary waiver authorized in October, 2021 expanding eligibility and reducing administrative burden within the PSLF program.
NACo will continue to monitor federal action on student loans.
ADDITIONAL RESOURCES
<p>All matters pertaining to children’s issues, foster care, public assistance and income support, services to senior citizens and individuals with disabilities, immigration policy, social services, and elementary,
With American Rescue Plan funds, counties are strengthening America’s workforce, addressing the nation’s behavioral health crisis, expanding broadband access, improving housing affordability and building prosperous communities for the next generation.
Learn More
