Biden’s Student Loan Relief Plan: GA Borrowers' Questions Answered

GEORGIA — More than 1.6 million borrowers in Georgia and more than 43 million 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 Georgia. It also cancels an additional $10,000 for those who received federal Pell Grants to attend college.

Georgians collectively owe $68.6 billion in student loan debt, with borrowers owing an average of $41,639. Nearly 21 percent of borrowers owe between $20,000 and $40,000, and 2.7 percent owe more than $200,000.

Opinions on Biden's announcement fell largely on partisan lines in the state. Democratic Sen. Raphael Warnock and Georgia gubernatorial candidate Stacey Abrams have long been proponents of cancelling student loan debt.

Abrams used the announcement to criticize her opponent in November's election, Gov. Brian Kemp.

"Working Georgians will finally get the kind of relief only millionaires get from Kemp’s tax scheme: $10,000," Abrams said.

Several Republican lawmakers from Georgia panned the plan on Twitter, including Rep. Jody Hice of the 10th District.

"Democrats can’t keep writing checks and expecting student debt to magically disappear," Hice said.

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

Still, questions remain among Georgia 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.