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

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FILE - New graduates walk into the High Point Solutions Stadium before the start of the Rutgers University graduation ceremony in Piscataway Township, N.J., on May 13, 2018. President Joe Biden is expected to announce Wednesday Aug. 24, 2022 that many Americans can have up to $10,000 in federal student loan debt forgiven. (AP Photo/Seth Wenig, File)


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