How To Figure Out If You Qualify For Biden’s Student Loan Forgiveness Plan

by | Aug 24, 2022 | Politics

President Joe Biden’s announcement that the Department of Education would be canceling student loan debt for some borrowers had a lot of people wondering on Wednesday whether they qualified. Americans quickly overloaded federal student aid websites ― and then turned to social media to commiserate.Millennial culture is crashing Nelnet because you can’t remember how much student loan debt above $10,000 you still have.— Eliza Bertrand (@Eliza_Kaylee) August 24, 2022

AdvertisementSo: Who is getting debt relief? Biden’s plan targets people who took out federal student loans (not private loans) and currently make less than $125,000 individually, or less than $250,000 for dual-income households. If you earn more than that, you’re still on the hook. People who received Pell Grants, a need-based type of student aid, can have up to $20,000 canceled. (“Up to” just means that if your outstanding balance is less than $20,000, you’ll have that amount wiped out.)People who did not get a Pell Grant can have up to $10,000 canceled.To check if you received a Pell Grant, log in to your Federal Student Aid account, the government website that tracks your federal student loans. You might use a different website to make payments because the government uses loan servicers ― companies like Nelnet ― to handle billing. On the FSA site, there will be a chart illustrating the financial aid you received for college between “loans” and “grants.” You can click on “grants” to see the breakdown, including whether you had any Pell Grants. Advertisement What do you have to do to get this relief? The Department of Education needs to have your income data on record. For some people who already have their information on file ― about 8 million borrowers ― the Biden administration says debt forgiveness will happen automatically. But it’s probably a good idea to cover your bases and fill out the application regardless. It’s not available yet, but the administration says it will open a “simple application” form “in the coming weeks.”An estimated 43 million student loan borrowers could benefit from the plan, the White House said Wednesday.If you want to get email updates about the debt relief initiative, you can sign up on the Department of Education’s website. (Just tick the box that says “Federal Student Loan Borrower Updates.”) What if you have remaining debt after the $10,000 or $20,000 cap? Biden extended the pandemic-era freeze on student loan payments through the end of the year. If you still have a balance, you’ll have to start making payments again in January. AdvertisementBut there will probably be some changes. The Biden administration has proposed a new rule that borrowers are required to pay no more than 5% of their discretionary income ― down fr …

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