95% of Federal Student Loan Borrowers Can Get Forgiveness

Are your federally-held student loans eligible for $10,000 forgiveness? The odds are in your favor—there’s a 95% chance that you meet the income requirement for President Joe Biden’s forgiveness plan.

That’s according to an analysis by the Congressional Budget Office (CBO), which released a report Monday estimating that the vast majority of direct loan borrowers meet the income criteria to receive $10,000 of student loan forgiveness:

• An individual or married-filing-separately income of $125,000 or less in either 2020 or 2021 
• A head-of-household or married-filing-jointly income of $250,000 or less in 2020 or 2021

Of those who get loan forgiveness, 65% received Pell grants, making them eligible for an additional $10,000 of forgiveness (for a total of up to $20,000). Out of those income-eligible borrowers, 45% will see their student loan debts completely canceled, the office estimated.

The analysis covered around 37 million borrowers with direct loans held by the Department of Education. In addition to those, borrowers with discontinued loans such as Perkins and FFEL loans can get loan forgiveness if they consolidate them into direct loans.

The CBO calculated these figures as part of its overall forecast for the cost of Biden’s student loan forgiveness plan, which they project will cost about $400 billion. The CBO’s projected price tag is in the middle range of the various cost estimates floated by different groups.  

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