Biden’s Student Loan Relief Plan: What Florida's Borrowers Should Know

FLORIDA — More than 43 million borrowers in Florida and across the U.S. stand to benefit under a historic and long-awaited student loan debt relief plan announced by President Joe Biden Wednesday.

The plan will forgive $10,000 in student loan debt for some borrowers in Florida. It also cancels an additional $10,000 for those who received federal Pell Grants to attend college.

Florida has the fifth-highest average borrower debt in the country at $38,459, according to Education Data Initiative. And 2,623,600 Floridians have student debt totaling $100.9 billion.

Residents and leaders in the Sunshine State have a mix of reactions, some welcoming the news, others critical of it.

• Also Read: Biden Cancels $10K In Student Loan Debt For Some Florida Borrowers

“That money means a lot to me as it represents 1/5 of my student loan debt. It makes the amount I owe seem less daunting,” Elsie Gilmore of St. Petersburg told Patch.

Meanwhile, Jennifer Hamey of Parrish told Patch, “I am still paying on my student loans. I will continue to pay as I took out the debt and it is not taxpayers' responsibility to pay debt I took out voluntarily to get my education so I could have a great career.”

St. Petersburg resident Teresa Mandala recognized the importance of the debt relief but felt there is more that could be done to help borrowers.

“Happy for progress, but still unclear how this will all shake down for me individually. I have ($50,000) in debt still after paying 21 years on it without missing a payment,” she told Patch. “I've paid my loan off and then some and still owe more than my original amount. Student loans are predatory. Interest rates on these loans need to be eliminated or taken way down. My student loans are the highest interest I've paid on a loan.”

Florida's lawmakers also chimed in on the topic.

Charlie Crist, the Democratic gubernatorial candidate this year, tweeted Wednesday that the relief would “(ease) the burden on Floridians crushed by student debt so they can focus on their careers, families and futures.”

Republican Sen. Marco Rubio, who is up for reelection, called it “an unfair burden,” according to WFLA.

“Forgiving student loan debt isn’t free. It means 85 percent of Americans with no undergraduate debt from college will be carrying the burden for those that do,” he said.

And Florida’s GOP Gov. Ron DeSantis called the plan a “divisive policy,” according to Fox 51.

"How many people are going to be impacted by the inflation and a very small number of people you're looking at are going to get these loans paid for by taxpayers," he said during a news conference in Orlando Thursday. "It doesn't really make sense. It's not a way to unify the country."

Under the new plan, Biden also directed officials to extend an existing pause on federal student loan payments until Dec. 31.

Questions remain among Florida borrowers who aren’t sure if they qualify for relief or what they might have to do to claim it.

Here are some answers we know so far:

How do I know if I qualify for relief?

Your annual income must be below $125,000 to be eligible. For couples filing taxes jointly, their yearly income must be below $250,000. If you received a Pell Grant in college and meet the income threshold, you’re eligible for up to $20,000 in debt cancellation.

According to the Washington Post, the Department of Education will use income information from 2020 or 2021 to determine eligibility.

Also, relief is capped at the amount of your outstanding debt. For example, if you’re eligible for $10,000 in debt relief but have a remaining balance of $5,000, you will only receive $5,000.

Private loans are not eligible for relief.

How do I receive my loan forgiveness?

According to the U.S. Department of Education, nearly 8 million borrowers whose income information is already available to the agency will receive their relief automatically.

The agency will launch an online application in the coming weeks if the Department of Education does not have your income information. The application will be available through Dec. 31.

Sign up for email alerts through the Department of Education to be notified when the application is open.

How does the new income-based repayment plan work?

While the Department of Education has always offered income-based repayment plans, Biden’s proposal aims to create a new program that substantially reduces future monthly payments for lower- and middle-income borrowers.

The new plan will ensure borrowers pay no more than 5 percent of their monthly discretionary income on undergraduate loans, down from 10 percent under the current income-driven repayment plan. The new program will also raise the amount of income considered non-discretionary, protecting it from repayment.

What if I took out a student loan this year?

Loans must originate before July 1 to qualify. Current students will qualify for loan forgiveness if their parent's income is below the required amount, the Post reported.

What do I need to do to extend my student loan pause through the end of the year?

Nothing. The pause will occur automatically.