Dear John,

Did you hear? President Biden recently announced his plan to cancel up to $20,000 in federal student loan debt per borrower. 

This is welcome news for so many Alabamians who are being crushed by student loans!

I believe that in the United States of America, a good education should be a ticket to the middle class. Tragically, across our nation, the soaring cost of college has made it near impossible for many Alabamians to pursue the American dream. 

At least 632,000 Alabamians owe a cumulative $23,500,000,000 in student loan debt. If you're one of those Alabamians, you know just how burdensome this debt can be, making it more difficult to buy a home, start a family, or create a small business.

With President Biden's announcement, the federal government is providing targeted economic relief to those who need it most. Read below to see what this announcement means for you, including whether or not you qualify for relief. You can also find this information by clicking here.

Who qualifies for student debt cancelation?

Under President Biden's plan, the U.S. Department of Education will provide up to $20,000 in debt cancellation to Pell Grant recipients with loans held by the Department of Education, and up to $10,000 in debt cancellation to non-Pell Grant recipients. Borrowers are eligible for this relief if their individual income is less than $125,000 ($250,000 for married couples).

What do I need to do in order to receive loan forgiveness?

If the Department of Education already has your income data, you will receive relief automatically. If the Department doesn't have your income data, the Administration will launch a simple application which will be available by early October. If you would like to be notified when the application is open, please sign up at the Department of Education subscription page here.

Once a borrower completes the application, they can expect relief within 4-6 weeks.

What is the Public Service Student Loan Forgiveness Program?

The Public Service Loan Forgiveness (PSLF) program forgives the remaining balance on your federal student loans after 120 payments working full-time for federal, state, Tribal, or local government; military; or a qualifying non-profit.

Temporary changes, ending on October 31, 2022 provide flexibility that makes it easier than ever to receive forgiveness by allowing borrowers to receive credit for past periods of repayment that would otherwise not qualify for PSLF.

Enrollments on or after November 1, 2022 will not be eligible for this treatment. Visit PSLF.gov to learn more and apply.

Is there other relief available?

Yes. The Biden-Harris Administration is proposing a rule to create a new income-driven repayment plan that will substantially reduce future monthly payments for lower- and middle-income borrowers. Find more information here.

When will the pause on student loan payments resume?

To ensure a smooth transition to repayment and prevent unnecessary defaults, the pause on federal student loan repayment will be extended one final time through December 31, 2022. Borrowers should expect to resume payment in January 2023. 

Where can I find more information about scholarships and other financial assistance to pursue a higher education?

For more information about federal student aid, visit studentaid.gov. Also, stay tuned for an announcement from my office about our very first Virtual Grants Workshop for Scholarships and Higher Education which will be streaming LIVE on my social media channels in the coming weeks! I'll be joined by experts from the U.S. Department of Education and institutions of higher education from across Alabama's 7th Congressional District.

I also want to remind you that, due to federal election laws, my ability to stay in touch with you will be somewhat limited beginning September 9th through Election Day on November 8th.

To stay up-to-date on the latest in Congress, I invite you to subscribe to my newsletter here. You can also stay connected with me on our website and social media pages (Twitter, Facebook, and Instagram).

Today and every day, it is an honor to serve you in Congress. As always, take good care.

I look forward to hearing from you,

Congresswoman Terri A. Sewell