Everything You Need To Know About Biden’s Student Loan Forgiveness Plan

President Joe Biden announced on Wednesday that the federal government plans to cancel up to $20,000 worth of federal student loans. However, not everyone with debt will qualify.

This action will include rules that will help maintain the balances of debtors who currently have high incomes. Those who qualify for the debt cancellation will need to navigate a federal loan servicing system and keep a close eye on their accounts and credit reports for any mistakes.

What's the Plan, Stan?

The plan also extends the pause on monthly loan payments. With the extension, borrowers won't have to resume payments until at least January. The goal is to work on a new proposal to create a more affordable, income-driven repayment plan.

Individuals who are single and earn under $125,000 will qualify for the $10,000 debt cancellation. If you are married and file your taxes jointly or are the head of the household, you will qualify if your income is under $250,00.

Who Qualifies?

Eligibility is based on adjusted gross income. Income figures from 2020 or 2021 can affect your eligibility.

If you received a Pell Grant and meet the income requirements, you could potentially qualify for an extra $10,000 in cancellation. Loans obtained after June 30th are not eligible for relief.

Only federal student loan debt is eligible for debt cancellation. This includes PLUS loans, regardless of whether the parent or the student took them out.

What Types of Debt Qualify?

Private loans are not eligible for debt cancellation. Neither are F.F.E.L loans.

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