Last Wednesday, President Joe Biden announced a plan to forgive $10,000 of federal student loan debt for low to middle income borrowers. Biden’s plan is a one-time debt forgiveness program that extends towards individuals who make less than $125,000 a year. For those who received federal Pell grants, up to $20,000 of student loan debt could be canceled.

The debt forgiveness plan includes loans disbursed before June 30, 2022. Any loans taken out for the fall 2022 semester and beyond will not qualify. This unfortunately means college freshman will not benefit from the program. 

“For students who started this fall and just took out loans this fall, it’s not for them, but students who were here last year and took out loans prior to that, it should work for them,” Beth Vollan, director of the Office of Financial Aid, said.

According to Vollan, 1,937 South Dakota State University students received Pell grants in 2021, and if they meet the income threshold, would qualify for up to $20,000 in loan cancelation. She also said the average indebtedness for SDSU students who took out federal direct student loans is $22,360 a person.

Due to the lack of public information about the debt cancelation plan, Vollan suggested students sign up for email notifications from the Department of Education related to federal direct loans. If individuals go to https://www.ed.gov/subscriptions, enter their email and click “Federal Student Loan Borrower Updates,” they should expect to receive information regarding the application within the next month. 

Vollan said from the information her office has received, students who applied for federal student aid in 2021 may not have to apply for program, but the loans will automatically be canceled. 

“For current students, what we’ve been told is that the students who filed the FAFSA last year, they potentially won’t even have to apply for it, because they’ll just use the income information that was on that FAFSA,” she said. “So, we’re thinking that maybe those students will just see that amount discharged at some point, but we don’t know when they’re going to start.”