After months of internal debate, President Biden announced a three-part plan on August 24, 2022, to provide additional student loan relief. Currently, more than 40 million Americans owe more than $1.7 trillion of educational debt, a balance that far exceeds outstanding credit card or auto debt, and many are struggling. Only about half of borrowers were repaying their loans in 2019, more than 10 million were in delinquency or default, and even more had applied for temporary relief including deferments and forbearances.

Targeted Debt Relief

Under this plan, the Department of Education (DOE) will cancel up to $20,000 of debt for borrowers with Pell Grant loans, and up to $10,000 for borrowers with other types of student loans, but only for those whose income was less than $250,000 (married), or $125,000 (single), during either...