California State University | Photo Courtesy

The White House announced on Aug. 24 a three-part plan to cancel $10,000 of student debt for borrowers with low to middle incomes — a move that could benefit about half of undergrad students in the California State University (CSU) system.

The plan is intended to deal with the economic stress many families are dealing with following the pandemic, according to a news release from the Biden-Harris Administration.

CSU Interim Chancellor Jolene Koester sent out a statement assuring the CSU’s commitment to reducing debt for students.

“I applaud and thank the Biden-Harris Administration for their dedication and ongoing efforts to support our students,” Koester said in the statement.

The statement cited research from that indicates the cost of four-year undergraduate education has nearly tripled since 1980, after accounting for inflation.

The Administration said federal support for students has not kept pace with the rising costs of college. The Pell Grant, a federal financial award for students with high economic need, used to cover about 80% of the cost of a four-year public college for students in need. Now, it only covers a third, according to the White House.

“That has left many students from low- and middle-income families with no choice but to borrow if they want to get a degree,” the White House news release states.

According to the chancellor’s response, approximately half of the CSU’s undergraduate students receive the Pell Grant – a federal financial award given to students who demonstrate high economic need – and will “be better positioned to strengthen the California workforce and communities” with the addition of federal debt relief.

The Department of Education is promising $20,000 in debt cancellation to Pell Grant recipients with loans held by the Department of Education, according to the White House statement, in addition to $10,000 in debt cancellation for students without the Pell Grant — however, some restrictions apply based on individual income.

“To ensure a smooth transition to repayment and prevent unnecessary defaults, the pause on federal student loan repayment will be extended one final time through December 31, 2022,” according to the White House fact sheet.

Loan relief will be applied within four to six weeks of submitting an application, according to the White House.

Sign up for the Dept. of Education subscription page for further notifications on loan borrowing. The Dept. of Education will accept applications until Dec. 31, 2023.