Episode 121

Student Loan Forgiveness; What You Should Know

The Department of Education recently announced a new plan which will provide for additional deferment of payments on federal student loan debt, as well as loan forgiveness for millions of borrowers. Tune in to learn the qualification criteria and see if you’re eligible.

Who Qualifies for Student Loan Forgiveness?

After the US Department of Education announced that they will be providing debt relief for millions of borrowers in the United States, many are left wondering if they will qualify and how to apply. Those that will qualify are individuals that have direct federal student loans. If you are single, and make $125,000 or less, you will qualify for up to $10,000 in loan forgiveness. If you are married, filing jointly or the head of household, and make $250,000 or less annually, then you will also qualify for up to $10,000 in loan forgiveness. Lastly, if you received the Federal Pell Grant while attending college, you will qualify for up to $20,000 in student loan forgiveness, and if you are a parent and took out the Parent Plus loan or a graduate student and took out graduate loans, your loans will also qualify provided you meet the income requirements. In addition to the income guidelines, eligible loans must have disbursed by June 30, 2022.

What is the Next Step?

The federal government has never forgiven student loan debt before in this magnitude. This has become very political and there are certain people that are of the opinion that the Department of Education does not have authority to provide this type of loan forgiveness. As a result, this will more than likely go to court, so sit tight and keep an eye out for more updates. If you want to be notified when the application is up and running (some people whose income is on file with the U.S. Dept. of Education will automatically be forgiven with no further action), I recommend signing up for The Department of Education newsletter which I have linked below in resources.

Notes:

In this episode, Luis speaks about the following and more:

  • Extension of the student loan repayment pause
  • Income guidelines for student loan forgiveness eligibility
  • Changes to the income-driven repayment plan
  • How to access information on the new changes to the Public Service Loan Forgiveness Program

Sources:

Resources: