President Biden’s $1.9 trillion COVID-19 relief package included a provision to cancel up to $10,000 in federal student loan debt for borrowers. However, many advocates for debt relief, as well as some members of Congress, have been calling for more substantial relief.
What is Biden’s Student Loan Forgiveness?
Biden’s Student Loan Forgiveness is a program proposed by President Joe Biden to provide relief for millions of Americans struggling with student loan debt. The program would cancel up to $10,000 in federal student loan debt per borrower and up to $50,000 for those who attended historically Black colleges and universities (HBCUs) and minority-serving institutions (MSIs). It is aimed at providing relief to borrowers with lower incomes who are struggling to repay their loans. However, the program has faced legal challenges and its implementation is still uncertain.
In response, President Biden announced in March a plan to cancel up to $10,000 in federal student loan debt for borrowers who were not covered by the previous relief provision. The plan would also provide additional relief for borrowers who attended historically black colleges and universities, as well as those with disabilities.
However, this plan is currently being held up by a court challenge. The Supreme Court heard arguments on the legality of the program in November, with a decision expected several months later.
If allowed to pass, the plan would mean that the student loan balances of millions of people could fall by as much as $20,000. This FAQ explains how the plan would work and what borrowers need to know.
The Department of Education has stopped accepting loan applications during the halt, but said it would hold onto all previously submitted applications. Tens of millions of people would qualify for debt relief under the plan, but debtors with high incomes would not receive any relief.
Those who do qualify would need to navigate the federal loan servicing system, which has been criticized for being difficult to navigate, and keep a close eye on their accounts and credit reports for any mistakes.
President Biden’s announcement also extended a pause on monthly student loan payments and provided details on a new proposal to create a more affordable income-driven repayment plan. The Education Department said that it would restart payments 60 days after the court cases have been resolved. If the courts have not resolved the issue by June 30, payments will resume 60 days after that.
President Biden announced a program that would provide cancellation of up to $10,000 in federal student loans for borrowers who meet certain criteria. The program is aimed at providing relief to those who have been struggling with student loan debt during the COVID-19 pandemic.
Who is eligible for the loan cancellation program?
Individuals who earn under $125,000 and file taxes as single or $250,000 for those who file taxes jointly or are the head of household are eligible for the loan cancellation program. Eligibility will be based on adjusted gross income. Income figures from 2020 or 2021 can render an individual eligible, but income from 2022 will not.
If you received a Pell Grant and meet these income requirements, you could qualify for an extra $10,000 in cancellation.
Only loans disbursed by June 30, 2022, are eligible for relief.
I have only graduate school debt, but I got a Pell Grant when I was an undergraduate. Am I eligible for the extra $10,000?
Yes.
I had a Pell Grant for only one year. Am I eligible for the extra $10,000?
Yes.
I qualified for only a partial Pell Grant. Am I eligible for the extra $10,000?
Yes.
How will the authorities verify my eligibility for a Pell Grant?
The government has access to its own administrative data and can determine whether you received a Pell Grant. They are also working on improving online accounts to make your Pell Grant history clearer. However, it’s always a good idea to keep your records in a safe place in case you need to refer to them in the future.
What types of student loan debt qualify for forgiveness?
Only federal student loans are eligible for loan forgiveness. Private student loans are not eligible.
Are Federal Family Education Loans (F.F.E.L. loans) eligible for loan forgiveness?
Possibly. If your F.F.E.L. loans were eligible for the payment pause that began in 2020, they are already eligible for this new cancellation offering. If they were not eligible for the pause, then they are not currently eligible for loan forgiveness.
Prior to September 29th, the Education Department informed borrowers that they could consolidate their F.F.E.L. loans into a federal direct loan, which would then be eligible for loan forgiveness. The Department also stated that it was working with outside entities that oversee the F.F.E.L. loans that are not currently eligible for cancellation, with the intention of making cancellation available to those borrowers. The Department advised borrowers who did not want to consolidate their loans to wait for further updates on this effort.
I was a student this year. Do I qualify?
If you were a student during the 2021-22 school year, you may qualify for loan cancellation. However, if you were considered a dependent during that time (based on the Department of Education’s definition of the term, not federal tax purposes), your eligibility will depend on your parents’ income rather than your own.
Are parent loans eligible?
Yes. The federal parent PLUS loans are eligible.
Are graduate student loans eligible?
Yes. Federal parent PLUS loans and PLUS loans for graduate students are both eligible for loan cancellation.
I didn’t finish my degree. Does that disqualify me?
No.
These are the some few FAQs and answers. You can find all the FAQs and answers for Biden’s student loan forgiveness here – https://www.nytimes.com/article/biden-student-loan-forgiveness.html
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