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New York — President Joe Biden’s student loan forgiveness program announced on Wednesday aims to provide $10,000 in student debt cancellation for millions of Americans.
But for federal Pell grant recipients, that amount is even higher: $20,000
So what exactly is a Pell grant? And why is there a special benefit for people who got one?
Created by the Higher Education Act in 1965 as a way to promote access to education, federal Pell grants are special scholarships reserved for undergraduates and certain other students with the most significant financial need. The grants generally don’t need to be paid back, but they often don’t cover the full cost of college — so recipients take out additional loans.
The Biden administration is targeting Pell grant recipients for additional forgiveness “to smooth the transition back to repayment and help borrowers at highest risk of delinquencies or default once payments resume,” according to the Department of Education.
Roughly 27 million recipients of Pell grants will now be eligible for loan forgiveness. But for some, the $20,000 will hardly made a dent.
Lynn Hunt, a data analyst in Portland, Oregon, is a Pell grant recipient who borrowed somewhere around $45,000 to $50,000 to attend the University of Wisconsin and has paid back about $15,000 but still owes $70,000 because of interest.
