That exhaling sound you’re hearing today is from millions of people carrying student loan debt.

The Biden administration is canceling up to $20,000 in student debt for Pell Grant recipients and up to $10,000 for individual borrowers who make under $125,000 per year. The administration also extended the pause on repayments by four months.

A statement from the White House read, “During the campaign, he promised to provide student debt relief. Today, the Biden Administration is following through on that promise and providing families breathing room as they prepare to start re-paying loans after the economic crisis brought on by the pandemic.”

It is estimated that nearly 20 million Americans could have their debt completely canceled under Biden’s plan.

The three-point plan also calls for the Department of Education to:

• Provide targeted debt relief to address the financial harms of the pandemic, fulfilling the President’s campaign commitment. The Department of Education will provide up to $20,000 in debt cancellation to Pell Grant recipients with loans held by the Department of Education, and up to $10,000 in debt cancellation to non-Pell Grant recipients. Borrowers are eligible for this relief if their individual income is less than $125,000 ($250,000 for married couples). No high-income individual or high-income household – in the top 5% of incomes – will benefit from this action. 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. Borrowers should expect to resume payment in January 2023.
  
  
• Make the student loan system more manageable for current and future borrowers by:
  
  
  • Cutting monthly payments in half for undergraduate loans. The Department of Education is proposing a new income-driven repayment plan that protects more low-income borrowers from making any payments and caps monthly payments for undergraduate loans at 5% of a borrower’s discretionary income—half of the rate that borrowers must pay now under most existing plans. This means that the average annual student loan payment will be lowered by more than $1,000 for both current and future borrowers.
    
    
  • Fixing the broken Public Service Loan Forgiveness (PSLF) program by proposing a rule that borrowers who have worked at a nonprofit, in the military, or in federal, state, tribal, or local government, receive appropriate credit toward loan forgiveness. These improvements will build on temporary changes the Department of Education has already made to PSLF, under which more than 175,000 public servants have already had more than $10 billion in loan forgiveness approved.
    
    
• Protect future students and taxpayers by reducing the cost of college and holding schools accountable when they hike up prices. The President championed the largest increase to Pell Grants in over a decade and one of the largest one-time influxes to colleges and universities. To further reduce the cost of college, the President will continue to fight to double the maximum Pell Grant and make community college free. Meanwhile, colleges have an obligation to keep prices reasonable and ensure borrowers get value for their investments, not debt they cannot afford. This Administration has already taken key steps to strengthen accountability, including in areas where the previous Administration weakened rules. The Department of Education is announcing new efforts to ensure student borrowers get value for their college costs.

Speaker of the House Nancy Pelosi (D-Calif.) said in a statement, “President Biden’s bold action is a strong step in Democrats’ fight to expand access to higher education and empower every American to reach fulfillment. By delivering historic targeted student debt relief to millions of borrowers, more working families will be able to meet their kitchen table needs as they continue to recover from the challenges of the pandemic. Importantly, this action will help those most in need, easing a financial burden disproportionately harming women and people of color.“

U.S. Rep. Guy Reschenthaler (R-Allegheny) tweeted, “The majority of student loan debt is held by people with graduate degrees. Biden knows forgiving their debt will supercharge inflation and shortchange Americans who paid their way or don’t have a degree entirely. In his eyes, it’s a small price to pay to appease his woke base.”

Pennsylvania state senator Jimmy Dillon (D-Philadelphia) tweeted, “Great news for student loan borrowers!”

The Department of Education lacks income data for most Americans with student debt, so implementing the cancellation under the income cap means the agency will either have to ask borrowers to attest that they fall below the income limit or borrowers will have to apply — a process that could be lengthy.

Biden is expected to speak from the Roosevelt Room at 2:15 p.m. ET.

• Department of Education Federal Student Aid Fact Sheet