Culver City’s Congressional Representative Karen Bass (D-CA) issued the following statement after President Biden announced the federal government will provide historic and targeted student debt relief for millions in the United States.
“The student loan debt crisis in this country impacts the ability of so many in my district to afford to live in our city. The Biden-Harris administration is taking action today to provide targeted student loan debt relief to working- and middle-class families,” said Rep. Bass. “With the enactment of the landmark Inflation Reduction Act, we lowered healthcare costs through prescription drug reform, allowing Medicare to negotiate drug prices for the first time. Now we’re saving Angelenos even more money by easing a financial burden disproportionately harming women and people of color. I have always believed every Angeleno deserves access to quality, affordable education and that student debt should not be a barrier to achieving the American dream. No one should be punished for trying to advance their education.”
The action relieves up to $20,000 in debt cancellation to Pell Grant recipients and up to $10,000 in debt forgiveness to non-Pell Grant recipients for individuals who learn less than $125,000 per year (or households earning less than $250,000). It also extends the federal student loan pause a final time through December 31, 2002.
The Department is also proposing a rule to create a new income-driven repayment plan that will substantially reduce future monthly payments for lower- and middle-income borrowers and protect more income from loan payments by:
Cutting in half—from 10% to 5% of discretionary income—the amount that borrowers must pay each month on their undergraduate loans, while borrowers with both undergraduate and graduate loans will pay a weighted average rate.
Forgiving loan balances after 10 years of payments, instead of 20 years, for borrowers with loan balances of $12,000 or less.
Covering the borrower’s unpaid monthly interest, so that unlike with current income-driven repayment plans, a borrower’s loan balance will not grow so long as they are making their required monthly payments —even when that monthly payment is $0 because their income is low.
For more specifics on today’s announcement, including answers to frequently asked questions, please visit a Department of Education website – go to studentaid.gov/debt-relief-announcement/