Question of the Week
Student Loan Forgiveness is Here!
Happy Friday. I imagine this is coming to you at a time when you’re already into your holiday weekend, so I’ll keep it short.
You’ve likely heard the news that President Biden has pushed through his Student Loan Forgiveness plan, forgiving up $10,000 for most borrowers and up to $20,000 for some. The relief will come to some 95% of borrowers, which will be some 43 million people.
Here are some highlights from the plan:
- You qualify for $10,000 in cancellation of federal student debt if you earn under $125,000 as a single person or $250,000 if you’re married filing jointly.
- If you received a Pell Grant and meet the income requirements, you get an extra $10,000 canceled.
- Your adjusted gross income (AGI) from 2020 or 2021 determines if you meet the income qualification.
- Only loans disbursed before June 30 qualify for cancellation
In addition to forgiveness, the Biden Administration’s plan:
- Extends the pause on federal student loan payments to December 31, 2020
- Allows borrowers who may be eligible for the Public Service Loan Forgiveness (PSLF) Waiver to apply for the waiver before its expiration on October 31, 2022
- Create a new Income-Driven Repayment (IDR) plan that will lower monthly payments and reduce the time required for loan forgiveness.
- And those of you who have recently paid off your loans may be able to get that money back.
A key thing to remember is that this forgiveness only applies to federal student loans, not private loans or any other debt (e.g., credit card debt). The NY Times has a great FAQ you can check out if you want more details.
Congrats to everyone who qualifies!
Quote of the Week
“All of this means people can start to finally crawl out from under that mountain of debt to get on top of their rent and their utilities, to finally think about buying a home or starting a family or starting a business. And, by the way, when this happens, the whole economy is better off.” – President Biden
Task of the Week
For a lot of you, this weekend is a long one. I hope you enjoy it!