- President Joe Biden announced he will forgive $10,000 in federal student debt for most borrowers and up to $20,000 for recipients of Pell Grants.
- Borrowers describe their reaction to the unprecedented financial relief after years of anticipation.
"I am so happy that Biden kept his promise," said Lea Ceasrine, 28, after the White House announced it will cancel up to $10,000 in federal student debt and up to $20,000 for recipients of Pell Grants who meet income qualifications.
As one of the roughly 27 million borrowers who earn under $125,000 a year and are eligible to receive up to $20,000, the Chicago-based podcast producer expects to get the full benefit of loan relief.
"For those of us who went to college on Pell Grants, it's emotional," she said.
Here's what forgiveness, which was announced Wednesday, will mean for her and two more Pell Grant recipients.
Ceasrine originally took out a mix of private and federal student loans to pay for her bachelor's and master's degrees and graduated with a loan balance near $70,000.
"That Pell Grant was everything," she said. "Without it, I would not have been able to go to college." Pell Grant recipients generally display exceptional financial hardship and represent more than 60% of the borrowers expected to benefit from the forgiveness plan, according to the U.S. Department of Education.
"Just because our parents didn't have money, that doesn't mean we didn't deserve a chance," she added.
During the Covid pandemic, Ceasrine was determined to keep up her payments despite the extended moratorium. (President Joe Biden also said the government will extend the payment pause on most federal student loans "one final time" through Dec. 31.)
"I made it my goal to pay down my first loan," she said. Ceasrine brought her outstanding balance down to roughly $50,000. After forgiveness is applied, that balance should be closer to $30,000.
"I feel like that's more manageable," she said.
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"It's a game changer for me," said Kaya Jones, 23.
Jones graduated from Temple University in 2020 with a bachelor's degree in political science and journalism.
To pay for school, she worked two jobs and relied on a combination of resources, including contributions from friends and family and student debt along with Pell Grants.
Her balance, which stood at $34,600, would be slashed by more than half after she gets $20,000 in forgiveness.
Jones plans to put some of the money toward a down payment on a house in or around Philadelphia. "That's really exciting," she said.
For Sara Guillermo, CEO of Ignite, a political leadership program for women, forgiveness won't make a dent on her $80,000 balance.
Guillermo, who lives in the San Francisco Bay Area, puts between $1,000 to $1,500 a month toward her student debt payments from undergraduate and graduate school. She received Pell Grants in college, but now earns above the income threshold to qualify for relief.
"I wish this happened 10 years ago," the 38-year-old said. "It's been a very long journey."
Still, Guillermo calls the move "an important first step."
"As the leader of a young women's leadership organization, student debt has time and again been the issue that prompts them to raise their voices, get involved in the political process, and demand change," she said.
"But there's still much work to be done to ensure young women have the financial resources to thrive," she added. "Action from the White House cannot end here."