How to qualify for Biden's new student loan forgiveness plan

Biden said the plan will give working and middle-class families breathing room when federal student loan payments resume in January 2023, keeping with his campaign promise.

On Wednesday, President Joe Biden announced that most borrowers would be able to cancel $20,000 in federal student loans.

Thousands of people could have their student loan balances reduced by $10,000 due to President Biden's move.

Pell Grant recipients can cancel up to $20,000 in debt from their federal student loans.

For individuals and married couples or heads of households, the plan is limited to incomes less than $125,000 per year.

Forgiveness of $10,000 is available only to borrowers earning less than $125,000 or less than $250,000 annually.

To qualify for this forgiveness of $20,000, borrowers must meet these income requirements and have received a Pell Grant during college.

A pause in student loan repayments has also been extended until December 31 by Biden's administration.

The Pell Grant is aimed at helping low-income students afford higher education.