On Wednesday, President Joe Biden announced that he will forgive $10,000 in federal student debt for qualifying borrowers and will also cancel up to $20,000 for recipients of Pell Grants.

Those who qualify for the relief include Americans who make less than $125,000 per year or $250,000 for married couples or heads of households. According to the Education Department, the relief is also capped at the amount of a borrower’s outstanding eligible debt.

The President will also extend the payment freeze one final time until the end of the year.

(DoD News photo by EJ Hersom)

Biden’s decision fulfills his campaign pledge and delivers financial relief to tens of millions of Americans.

“In keeping with my campaign promise, my Administration is announcing a plan to give working and middle class families breathing room as they prepare to resume federal student loan payments in January 2023,” Biden said in a tweet on Wednesday.

U.S. Secretary of Education Miguel Cardona said in a statement, “Today, we’re delivering targeted relief that will help ensure borrowers are not placed in a worse position financially because of the pandemic, and restore trust in a system that should be creating opportunity, not a debt trap.”

Around 9 million borrowers could have their balances entirely cleared by Biden’s plan, according to higher education expert Mark Kantrowitz.

CNBC reports that Biden’s decision to move ahead with $10,000 in student debt cancellation for borrowers who earn under $125,000 will cost the federal government around $244 billion, Kantrowitz estimated. The $20,000 in relief for Pell Grant recipients may add around another $120 billion to the government’s costs.

NPR says according to a senior administration official, about 43 million borrowers will benefit, and 20 million will have their debt completely canceled.

The Education Department will announce further details on how borrowers can claim this relief in the weeks ahead.

President Biden will speak at 2:15 p.m. ET to formally announce the plan.