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1 1 (September 12, 2022)

handle is hein.crs/goveitw0001 and id is 1 raw text is: A Congressional ____ SA* Research Service The Administration's Newly Announced Student Loan Debt Cancellation Policy Updated September 12, 2022 On August 24, 2022, invoking the HEROES Act of 2003, the U.S. Department of Education (ED) announced a new student loan cancellation policy to address the financial harms of the pandemic for low- and middle-income borrowers that is to make available to millions of federal student loan borrowers up to $20,000 of loan cancellation benefits per borrower. ED is referring to this action as one- time student loan debt relief. This action represents a departure from other types of student loan debt relief, which historically have been available to borrowers on a more targeted basis and typically provide relief to individuals for fulfilling employment requirements, for repaying their loans according to an income-driven repayment plan, or following borrower hardships (e.g., total and permanent disability). These programs, to date, have provided relief to hundreds of thousands of borrowers, although they could ultimately provide relief to more. The Administration's new policy is broader in scope and is to be available to tens of millions of borrowers based on limited eligibility criteria. This Insight summarizes the recently announced student loan cancellation policy. The One-Time Student Loan Debt Relief Policy Federal student loan debt exceeds $1.6 trillion and is owed by approximately 45 million borrowers. On August 24, 2022, ED announced a one-time student loan debt relief policy that it estimates will provide some amount of loan cancellation to most borrowers. The administration plans to cancel the following: up to $10,000 in student loans for borrowers whose annual income in 2020 or 2021 was less than $125,000 (for individuals or married borrowers who file their federal income taxes separately), or $250,000 (for married couples filing jointly or heads of households); current dependent students will be eligible for cancellation based on parental income; and an additional $10,000, for a total of up to $20,000, in student loans for borrowers who meet the above criteria and received at least one Pell Grant in any amount at any point. A borrower's cancellation benefit is to be capped at the amount of their outstanding debt. Thus, if an individual is eligible for $20,000 in cancellation benefits but has an outstanding balance of $15,000, they would receive $15,000 in cancellation benefits. Congressional Research Service https://crsreports.congress.gov IN11997 CRS INSIGHT Prepared for Members and Committees of Congress

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