ACCT Statement on President Biden's Student Loan Debt Forgiveness Plan
Washington, D.C.—August 24, 2022—Today, President Biden announced his Administration’s three-part plan for student loan debt forgiveness.
- Part 1 is the final extension of the student loan repayment pause; the pause will now extend until December 31, 2022, with payments resuming in January 2023.
- Part 2 includes $20,000 in forgiveness for Pell Grant recipients and $10,000 in forgiveness for students that did not receive Pell Grants. To qualify for forgiveness, borrowers must earn less than $125,000 as individuals or less than $250,000 as married couples/heads of household.
- Part 3 proposes a rule change to create a new income-driven repayment plan that would require borrowers to pay no more than 5% of their discretionary income. Borrowers with less than $12,000 in debt would receive forgiveness in ten years, rather than twenty. This element is a benefit for community college students as that amount is the maximum loan permitted for two years of enrollment.
In response to this announcement, Association of Community College Trustees President and CEO Jee Hang Lee said:
“In focusing student loan forgiveness on low- and middle-income earners, with additional support for Pell Grant recipients, the Biden Administration’s plan provides relief for those borrowers who need it most.
“This group includes the borrowers who are most likely to default on their loans: students with the lowest loan balances and students of color. These two groups are also more likely to attend community colleges. For this reason, the community college borrowers who are most likely to struggle repaying their debts will receive the support that they need.
“ACCT encourages the Biden-Harris administration and Congress to continue to tackle the problem of college affordability, including by increasing the maximum Pell Award, creating a federal-state partnership to incent state investment in community colleges, and granting access to the Pell Grant for short-term programs. These changes will address affordability on the front end and help prevent the need for similar debt relief in the future.”
The Association of Community College Trustees (ACCT) is a non-profit educational organization of governing boards, representing more than 6,500 elected and appointed trustees who govern over 1,200 community, technical, and junior colleges in the United States and beyond. For more information, go to www.acct.org. Follow ACCT on Twitter @CCTrustees.