Student Loan Cancellation and Payment Pause: Live Updates
More: Student Loan Repayments Would Be ‘Catastrophic’ for These Struggling Families
“Today, the Biden Administration is following through on that promise and providing families breathing room as they prepare to start re-paying loans after the economic crisis brought on by the pandemic,” the administration said via a White House fact sheet.
Under the plan, up to $10,000 in federal student debt relief may be offered to borrowers earning less than $125,000 (or $250,000 if married). That figure rises to up to $20,000 in student loan cancellation for Pell Grant recipients. Further, the White House announced an extension of the student loan repayment pause “one final time” — to Dec. 31, according to a tweet from the president.
Per The Wall Street Journal, said student loan forgiveness also applies to Parent Plus loans, according to White House sources quoted by the outlet.
“The inclusion of Parent Plus loans means millions of families who have taken on massive debt could see their debt load decreased. While the government imposes a limit on the amount of undergraduate debt a student can take out, the Parent Plus program lets people borrow the total cost of attendance — room and board, books and personal expenses on top of tuition — for as many years as it takes to get a degree,” The Wall Street Journal reported.
While this provision is not yet included in the White House’s fact sheet, Washington Post reporter Jeff Stein corroborated this story, tweeting that: “Parent Plus loans ARE included in the debt forgiveness plan, per this reliable source Again: We’ll need to see final details but would be very big deal if on point.”
What is a Parent Plus Student Loan, and How Much Do Parents Owe?
Sallie Mae explains on its website that Parent Plus loans are federal student loans issued directly to parents.
“The government takes a look at your credit, offers some flexibility in repayment options, and the ability to fill funding gaps after exhausting federal student loans to students, grants, and scholarships. For the 2021-2022 school year, the Parent Plus loan has a 6.28% interest rate plus an origination fee of 4.228%,” according to the website.
The Hill reported in June that, according to the latest data from the Department of Education, parents of 3.6 million students owe more than $107 billion in Parent Plus loans as of March 2022. This figure represents roughly 6% of the entire $1.6 trillion in federal student loan debt Americans owe.
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This article originally appeared on GOBankingRates.com: Will Student Loan Forgiveness Include Parent Plus Loans?