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- Parents who took on PLUS student loans for their kids are eligible for up to $10,000 from Biden's loan forgiveness.
- But 8 Democratic lawmakers want Biden to offer the full $20,000 relief to parents whose kids are also Pell recipients.
- PLUS loans are restrictive and can keep borrowers in repayment for decades.
A group of Democratic lawmakers want to ensure parents who take on student debt loads for their kids can get the maximum benefits from President Joe Biden's loan forgiveness.
On Monday, eight Democratic senators, led by Maryland's Chris Van Hollen, wrote a letter to Biden requesting that he further expand debt relief benefits to borrowers who took on parent PLUS loans — a type of federal loan parents can take out for their kids that can cover up to the full cost of attendance, with the highest interest rate. As the lawmakers noted, there are over 3.6 million families with PLUS loans totaling $107 billion, and the restrictions on the loans can keep parents paying off the debt long after their children graduate.
At the end of August, Biden announced up to $20,000 in student-loan forgiveness for Pell Grant recipients making under $125,000 a year, and up to $10,000 in relief for other federal borrowers under the same income cap. But as the lawmakers noted, the additional $10,000 in relief currently doesn't apply to parent PLUS borrowers whose kids were Pell recipients, and they're urging Biden to include that group of borrowers in the expanded relief.
"High origination fees and high interest rates for Parent PLUS borrowers have forced the lowest income borrowers, Black, Brown, and older borrowers to face difficult tradeoffs in order to keep up with student loan payments, resulting in possible loan default or, in the case for some seniors, offsets in Social Security benefits," the lawmakers wrote.
"These borrowers demonstrated significant financial need at the time they borrowed the PLUS loan, as evidenced by the fact that their students qualified for Pell Grants based on family income," they added. "Like student borrowers who received Pell Grants, these borrowers also face numerous barriers to successful repayment and should receive relief."
They also urged Biden to include parent PLUS borrowers in expanded relief under the Public Service Loan Forgiveness (PSLF) program, and the recently announced new income-driven repayment plan intended to significantly lower borrowers monthly payments once the student-loan payment pause ends in January.
Leading up to Biden's announcement of blanket loan forgiveness, it was unclear whether parents would be included in the relief — but his Education Department confirmed both parents and graduate students with PLUS loans can take advantage of the debt cancellation if they fall under the $125,000 income cap.
The department has not yet commented on the lawmakers' requests.
A report from The Century Foundation found that this relief could be significant, benefitting Black borrowers who "are almost twice as likely as other parent borrowers to still be in repayment for student loans for their own educations: 37 percent, versus roughly 20 percent for all other groups," per the report.
source https://www.businessinsider.com/biden-student-loan-debt-forgiveness-expand-parent-plus-pslf-2022-9