President Joe Biden announced on Monday that citizens with student debt can now start applying for student loan forgiveness, with some people saving up to $20,000. The programme is expected to reduce debts for up to 43 million people in low and middle-income families, in a report from CNN, Biden said:
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Today, I’m announcing millions of people working and middle-class folks can apply and get this relief. And it’s simple and it’s now. It’s easy. This is a game changer for millions of Americans … and it took an incredible amount of effort to get this website done in such a short time.
Who is eligible?
Eligibility is subject to certain income requirements listed here in a report from YahooFinance:
- Borrowers who earned less than $125,000 in either 2020 or 2021 (and households who made less than $250,000 in either of those years) could have up to $10,000 of their student loan debt cancelled.
- Pell Grant recipients - those with exceptional financial need - could receive up to $20,000 in debt relief.
It is only public loans - those from the Department of Education - that are eligible for debt relief. Both Federal Direct and Federal Plus loans are included in the programme.
What to do?
If you think you are eligible for debt relief you can go on the website and complete the forms in either English or Spanish. It will need your personal details, including your Social Security Number and borrowers will have until 31 December 2023 to submit an application.
The Department of Education has the information already on around 8 million borrowers and these people should receive the debt forgiveness automatically if they meet the income requirements. However, they are still urging everyone to go online and fill in the application anyway.
If you have already paid off your loan and you have taken advantage of pause on payments and interest accrual during COVID-19 it may be possible to receive a refund. All you need to do is request your loan servicer, as per Moneywise, and it is recommended everybody begin the process as soon as possible.
Sources used:
- CNN'Student loan forgiveness applications now formally open, Biden says'
- YahooFinance'Student loan forgiveness applications are now open — here's what borrowers need to know to get their relief'
- Moneywise 'I already paid off my student loans! Am I eligible for a refund and loan forgiveness? Yes, up to $20K — but only under these two specific conditions'
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