At the White House this week, President Joe Biden announced a plan to forgive  per borrower, plus another $10,000 for those with federal Pell grants. 

, student loan debt is the largest form of consumer debt outside of mortgages,  — higher than auto loans and credit card debt. According to , the median outstanding education loan is between $20,000 and ksf2 $24,999. 

President Joe Biden’s plan will forgive  per eligible borrower, plus another $10,000 for those with federal Pell grants. 

«This means people can start to finally crawl out from under that mountain of debt,»  while announcing the plan.

Biden’s announcement follows a series of focused student-loan forgiveness orders by the federal government, including for , for students and for . 

Are you eligible for student loan debt forgiveness? Here’s what you need to know, including exactly who qualifies, how much debt will be erased and the process for applying.

For more on debt, here’s how to and the

Who qualifies for loan debt forgiveness?

The White House’s plan will forgive federal student loan debt for borrowers who earned less than $125,000 — or less than $250,000 for heads of households or married couples filing jointly. Along with undergraduate federal loans, the plan covers graduate and parent PLUS loans, .

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Only those student loans provided by the government — including Pell grants — qualify for the forgiveness plan. Private loans made by banks, credit unions or other financial institutions are not included.

How do I sign up to have my debt forgiven?

Nearly 8 million borrowers may automatically have their debt canceled because their income information is already filed with the Education Department. The department could have your information if, for example, you are enrolled in an income-driven repayment plan.

If the Education Department doesn’t have your income data, details about applying for debt forgiveness will be made available «in the coming weeks,» the White House said, and definitely before the end of the year.

How much student loan debt is being forgiven?

The  that, at the start of 2022, about 45 million Americans were carrying federal student loans.

For those who qualify under the income caps, the White House plan would erase $10,000 of debt from their federal student loans. Those with Pell grants, roughly 27 million borrowers, would get an additional $10,000 of their debt canceled, bringing their total to $20,000 in canceled debt, according .

In all, the plan is expected to wipe out $321 billion in federal student loans.

Roughly one-third (31%) of borrowers will see their entire debt erased, , while the average borrower would receive $8,478 in student loan forgiveness. 

Will the administration cap monthly loan repayments?

The administration is also proposing a cap on monthly undergraduate student loan repayments at 5% of the borrower’s monthly salary, a major change from the 10% cap under the current repayment plan.

The proposed plan would cover the borrower’s unpaid monthly interest, so their loan balance would not grow so long as they made regular minimum monthly payments, the Education Department said.

Borrowers with undergraduate and graduate loans will pay , the Education Department said.

Hasn’t the Education Department already forgiven some student loans?

The Biden administration has scratched student loans for some borrowers already, including those in public service, and .

Prior to the announcement,  already approved nixing $32 billion in loans for 1.6 million borrowers.

What about the pause on student loan payments and interest?

The pause on , which was slated to expire on Aug. 31, has been extended through Dec. 31, 2022. Payment requirements will resume in January 2023.

Loan repayments have been paused seven times since former President Donald Trump’s administration first instituted a moratorium .

I’m still in college with student loans. Will $10,000 of my federal student loan debt be canceled after I graduate?

Students currently in college with loans are eligible to have their loans forgiven. However, borrowers who are dependent students will be eligible based on parental income, rather than their own income, the administration said. 

For more on loan forgiveness, here’s what to know about applying for ,  how having your debt canceled  and .