After more than a year of deliberations and debates, President Joe Biden has decided to cancel some student loan debt millions of Americans have.
Under the plan, federal student loan borrowers can get up to $10,000 in forgiveness, while those receiving the government’s aid for low-income families can get additional grants of up to $10,000. Only those with an adjusted gross income of $125,000 a year or less can qualify.
The White House also announced that it would extend the moratorium on payments for student loan borrowers until December 31. It also said that it would cap monthly payments for undergraduates.
According to the White House, about 43 million student loan borrowers are expected to be eligible for the program. About 20 million individuals will have their debts erased completely. The policy is expected to deliver the biggest single discharge of student loan debt in history.
Who Qualifies?
Before you can start considering how you can benefit from the new policy, you must make sure you’re eligible. Here are the requirements you need to meet to be considered for student loan forgiveness. You’re a current student loan holder, and your household makes less than $125,000 annually. You’re also a recipient of a government aid program known as the Perkins Loan.
If you’re not eligible for the program and have a private student loan, it’s essential to look at the various available options. A student loan refinances is one of the most common types of loan modification available. This type of deal allows you to replace your existing loan with a new one with a lower interest rate.
How to Apply
After you have identified all of the requirements, you must ensure that you’re ready to take advantage of the program. The White House said that the application process for student loan forgiveness would begin in early October.
The White House also said that specific student loan borrowers should apply before November 15, 2022. They have until December 31, 2023, to take advantage of the program.
You can start the process by making an application through the US Department of Education. This will provide you with the necessary details to begin the process. You’ll also need to demonstrate that you have federal student loan debt. Before beginning the application process, ensure you have all the necessary documents ready.
When Do Repayments Start?
To help more people, former Vice President Joe Biden said he would extend the federal student loan payments moratorium for people with more than $10,000 in debt. This will allow the Education Department to make a more accurate calculation of monthly payments.