What's a Pell grant? How it affects student loan forgiveness

Student loan
Posted at 1:19 PM, Aug 25, 2022

NEW YORK (AP) — President Joe Biden’s student loan forgiveness program announced Wednesday aims to provide $10,000 in student debt cancellation for millions of Americans.

For federal Pell grant recipients, that amount is $20,000.

Pell grants were created by the Higher Education Act in 1965 as a way to promote access to education. These scholarships are reserved for undergraduates and certain other students with the most significant financial need.

According to the Department of Education, the Biden administration is targeting Pell grant recipients with additional loan forgiveness “to smooth the transition back to repayment and help borrowers at highest risk of delinquencies or default once payments resume."