On Wednesday, President Joe Biden revealed his student load debt plan. Biden plans to forgive $10,000 in student loan debt if you qualify. So who qualifies?
This specific plan applies to borrowers with federal student loans. If you didn’t receive the Pell Grant then you can qualify.
Individual borrowers who make less than $125,000 yearly and married couples or heads of households who make less than $250,000 yearly but did receive a Pell grant as an undergraduate student will have up $20,000 of their student loan debt forgiven.
It is said that some 8 million loans may be forgiven. This may be done automatically because the Department of Education has some borrower’s income information. We should see the application in the next few weeks. We should all receive news once the Biden administration launches the application. Go to studentaid.gov to sign-up to be notified when the application drops.
Once the application has been received, it could take anywhere from four to six weeks for the borrower to see the relief. The federal student loan repayment pause is officially over as of December 31. If you want the relief before then you should apply no later than November 15.
Even though the loan repayment starts back up in January 2023, the Biden administration is proposing a new repayment plan. The plan proposes that the borrower will pay back not more than 5% of their monthly income. As of right now, it is set at 10%.
The rule would also increase the amount of income that is considered “non-discretionary income” so no borrower earning below 225% of the federal poverty level will have to make a monthly payment. For borrowers with loan balances of $12,000 or less, loan balances would be forgiven after 10 years of payments instead of the current 20-year mark, under the proposed new income-driven repayment plan.
If you think you qualify, be on the lookout for more information, and don’t forget to apply. This will help many individuals and families.
Source CNN
