On Wednesday, the Biden administration announced the president’s plan to relieve up to $10,000 of student loan debt for millions of borrowers. Pell Grant recipients– students who come from low-income households–may receive even more debt cancellation: up to $20,000. The process has not officially opened up (details expected in the coming weeks), but here are things to know to get you ready.
To be eligible for loan cancellation, according to the Biden administration’s announcement, you must:
- have an individual income below $125,000 or $250,000 if you’re a head of household or a married couple
- provide your income information the U.S. Department of Education if they do not already have it on file.
If you don’t know whether you received a Pell Grant in college, you can log into your account on the federal student financial aid website, studentaid.gov
Pell Grants are usually awarded to undergraduates with “exceptional financial need” after submitting a Free Application for Federal Student Aid (FAFSA). These grants typically don’t have to be repaid. For 2022-2023, the maximum Federal Pell Grant award is $6,895, depending on expected family contribution, how much it costs to attend your school, whether you work full-time or part-time, and how much time you plan to attend school that year (i.e. the full academic year or less). You can also apply for a Pell Grant annually, for a maximum of 6 years.
Because Black students are almost twice as likely as white students to receive a Pell Grant, they stand to benefit most from the additional debt cancellation. In the 2015-2016 academic year, over 57 percent of Black undergraduates received the grant compared to 31.3 percent of white students.