Out of the roughly 45 million Americans with federal student loan debt, here’s who stands to benefit the most from the plan announced Wednesday by President Joe Biden that gives $10,000 in relief for all borrowers with an annual income below $125,000 and $20,000 in relief for those who qualified for federal Pell grants earmarked for low-income undergraduates below the income cap.
The initiative could instantly wipe out all outstanding federal student loans for up to 14.6 million borrowers who held less than $10,000 in debt as of the end of June, accounting for 32% of all borrowers, according to federal data, provided those individuals fall below the income cap.
The policy will also erase at least half of the student loan debt held by the 20.5% of borrowers who owe between $10,000 and $20,000, and will take a significant chunk out of the $20,000 to $40,000 owed by another 21.4% of borrowers.
However, the relief does not move the needle much for the most indebted Americans: Some 38% of the $1.62 trillion in total outstanding federal student loan debt is held by borrowers with balances of more than $100,000, even though they account for just 7.5% of all borrowers.
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