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Federal student loan relief program to open applications in coming weeks

Loan borrowers can apply for the program beginning October
Posted at 8:15 AM, Aug 31, 2022
and last updated 2022-08-31 11:15:04-04

President Biden unveiled a student loan relief program that will affect 45 million borrowers, according to the White House. They said an undergraduate student with loans typically has nearly $25,000 in debt.

The application for the program is expected to open in early October.

“The people who are going to have a little more money in their pockets, that's certainly positive," said Dr. Peter Rupert, a local economist and professor at UC Santa Barbara.

The Department of Education will provide up to $20,000 in debt cancellation to Pell Grant recipients, and up to $10,000 for non-Pell Grant recipients for loans held by the Department of Education.

Borrowers are eligible if they make under $125,000 as an individual or married couples who make less than $250,000 together.

A CNBC poll, conducted by Momentive, found that 59% of Americans they polled believe it will make inflation worse.

“Many people who are against it have been claiming it's going to be very inflationary, but as I said, I don't think that the scale of the program is really going to lead to anything inflationary," said Dr. Rupert.

The Department of Education estimates that almost 90% of recipients will be those making less than $75,000 a year.