Biden cancels $10K in student loan debt per borrower — what to know

President Joe Biden announced Wednesday that his administration will cancel $20,000 in student loans per borrower if they went to college on Pell Grants and $10,000 in student loan debt per borrower for those who didn’t. 

The cancellation will apply to all federal student loan borrowers making less than $125,000 per year, or $250,000 per year for married couples, according to the administration. They also unveiled a proposal that would allow those who have undergraduate loans to be able to cap their repayment at 5% of their monthly income.

The department said it will announce further details on how borrowers can claim this relief in the weeks ahead. The department estimates that nearly 8 million borrowers may be eligible to receive relief automatically because relevant income data is already available. It is also making available a legal memorandum regarding its authority for these discharges.