The White House recently forgave up to $10,000 to student loan borrowers as part of a larger debt forgiveness program. There are still quite a few questions to be answered, but here are some key points to know.
- Pell vs. non-Pell: Loan forgiveness of up to $10,000 is available to non-Pell Grant recipients and up to $20,000 for Pell Grant recipients. Only Federal student loans are able to be forgiven. Loans held through a private lender are ineligible for this program.
- No Surplus: The amount of student loan forgiveness available depends on how much you still owe. If you only owe $8,000 in federal loans but qualify for $20,000 of relief, you will not be receiving the surplus of $12,000.
- Income Cap: Borrowers with pandemic-era salaries under $125,000 (for individuals) or under $250,000 (for married couples or heads of households) are eligible for relief.
- Loan Dates: Federal loans taken out after June 30, 2022, do not qualify for loan forgiveness.
- Application Process: Depending on your lender, you may already be approved and have your account credited by the end of the year. However, an application is expected to be released in the coming weeks before the student loan payment pause ends on December 31, 2022.
Be aware, as more details are released, scams may also pop up. Remember to practice caution and good business sense if someone contacts you about your student loans.
If you need help with understanding student loan forgiveness and how it could impact your financial plan, cash flow, debt management, and more, feel free to...
This content is developed from sources believed to be providing accurate information. The information in this material is not intended as investment, tax, or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Digital assets and cryptocurrencies are highly volatile and could present an increased risk to an investors portfolio. The future of digital assets and cryptocurrencies is uncertain and highly speculative and should be considered only by investors willing and able to take on the risk and potentially endure substantial loss. Nothing in this content is to be considered advice to purchase or invest in digital assets or cryptocurrencies.
Enjoying Escient Financial’s Insights?
Escient Financial does NOT sell subscriber information. Your name, email address, and phone number will be kept private.
