Will student loan forgiveness include Parent Plus loans?

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President Joe Biden announced his administration’s long-awaited plan for student loan forgiveness on August 24.

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“Today, the Biden administration is delivering on that promise and giving families a break as they prepare to begin repaying their loans following the pandemic-driven economic crisis,” the administration said via a plug-in. information from the White House.

Under the plan, up to $10,000 in federal student debt relief can be offered to borrowers earning less than $125,000 (or $250,000 if married). That figure adds up to $20,000 in student loan forgiveness for Pell Grant recipients. In addition, the White House announced an extension of the student loan repayment pause “one last time” – until December 31, according to a tweet from the president.

According to the Wall Street Journal, the student loan forgiveness also applies to Parent Plus loans, according to White House sources cited by the outlet.

“The inclusion of Parent Plus Loans means millions of families who have taken on massive debt could see their debt load decrease. As the government places a limit on the amount of undergraduate debt a student can take on, the program Parent Plus allows people to borrow the full cost of attendance — room and board, books and personal expenses plus tuition — for as many years as it takes to graduate,” the Wall Street reported. Log.

Although this provision is not yet included in the White House fact sheet, Washington Post reporter Jeff Stein corroborated this story by tweeting that: “Parent Plus loans ARE included in the cancellation plan. debt, according to this reliable source. Again: we’ll have to see the final details, but it would be very important if it was on point.

What is a Parent Plus student loan and how much do parents owe?

Sallie Mae explains on her website that Parent Plus loans are federal student loans given directly to parents.

“The government is reviewing your credit, providing some flexibility in repayment options and the ability to fill funding gaps after you exhaust federal student loans, grants and scholarships. For the 2021-2022 school year, the Parent Plus loan has an interest rate of 6.28% plus an origination fee of 4.228%,” according to the website.

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The Hill reported in June that, according to the latest Department of Education data, parents of 3.6 million students owed more than $107 billion in Parent Plus loans as of March 2022. That figure represents about 6% of all $1.6 trillion in federal loans. student loan debt that Americans owe.

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About the Author

Yael Bizouati-Kennedy is a full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She has also worked as a VP/Senior Content Writer for major New York-based financial firms, including New York Life and MSCI. Yael is now independent and most recently co-authored the book “Blockchain for Medical Research: Accelerating Trust in Healthcare”, with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in journalism from New York University and one in Russian studies from Toulouse-Jean Jaurès University, France.

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