Alaskans who have federal student loans may soon feel some relief

Published: Sep. 22, 2022 at 4:58 PM AKDT
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FAIRBANKS, Alaska (KTVF) - A new student debt relief plan is expected to help 40 million borrowers nationwide who have taken out federal student loans.

According to the Biden administration, student loan borrowers who make under $125,000 will be eligible for $10,000 student loan forgiveness for federal loans. If you received a Pell Grant you will be eligible for $20,000 student loan forgiveness.

The White House has released a state-by-state breakdown, showing that all 50 states will benefit.

In Alaska, 37,300 Pell Grant recipients are promised $20,000 student loan forgiveness, while 60,500 other borrowers who took out federal loans will be getting $10,000.

Nearly 90 percent of the benefits will go to those earning less than $75,000 annually.

Details are still being worked out and an increase of student loan service providers are needed to process the loan forgiveness applications.

The U.S. Department of Education states the application form will be available online sometime in mid-October. When that happens, people will be able to log on and apply. Once approved, the department says borrowers will likely see their balances adjusted in four to six weeks.

“It’s just a little more breathing room to give people the comfort to be able to use a little bit of their income to invest back in themselves and we expect this to really make a difference for millions and millions of hard working Americans who are going to be able to breathe a little bit more easy,” says U.S. Department of Education, Jordan Matsudaira.

More details are expected within the next couple weeks.