President Joseph Biden announced on Wednesday that the federal government would cancel up to $20,000 of federal student loans for those who qualify.
Biden’s plan will forgive up to $10,000 in debt for those who did not attend college on a Pell grant and $20,000 for those who were Pell grant recipients. Forgiveness only applies to individuals earning less than $125,000 a year, or $250,000 for married couples or households. The plan will also extend the pause on student loan payments through Dec. 31 and will allow borrowers to cap repayment for undergraduate loans at 5% of their monthly income.
This plan is set to impact both current Duke students and alumni.
Current students whose loans were fully disbursed prior to June 30 and meet the other criteria should be eligible for loan forgiveness, according to Miranda McCall, assistant vice provost and director of the Karsh Office of Undergraduate Financial Support.
“It’s also important to know that the Department of Education has indicated that for nearly 8 million borrowers, the loan forgiveness will be automatic because the Department already has the relevant income information on file from the [2021-2022] FAFSA,” McCall wrote in an email to The Chronicle. “For those that don’t receive the automatic forgiveness, an application will be provided.”
Currently, 70% of Duke undergraduate students graduate without any loans, according to McCall. For the remaining 30% of undergraduates who do borrow, the average student debt is $24,219, which includes all loans.
Only federal student loans will be canceled in Biden’s plan. For Duke students, median debt at graduation for federal loans is $13,500, according to McCall.
In addition, twelve percent of Duke students receive a federal Pell grant, per McCall.
McCall wrote that current students can view their financial aid history in DukeHub, which will also provide information about whether or not they received a Pell grant when borrowing a federal loan.
Alumni can go to the Federal Student Aid website to determine their Pell grant and federal loan borrowing history. They can also contact their loan servicer directly for information on how much they owe.
Get The Chronicle straight to your inbox
Signup for our weekly newsletter. Cancel at any time.
Adway S. Wadekar is a Trinity junior and former news editor of The Chronicle's 119th volume.