Who qualifies under new student loan forgiveness plan?
ALBUQUERQUE, N.M. — More than 40 million Americans could see their student loan debt reduced, and in many cases eliminated, under a forgiveness plan President Joe Biden announced Wednesday.
WHICH LOANS QUALIFY?
Only federal loans qualify, including undergraduate, graduate, and Parent PLUS loans. Private loans do not qualify, including in instances where people have consolidated their loans through a private bank.
INCOME TO QUALIFY
To qualify, you have to earn less than $125,000 per year or double that – $250,000 – for couples who file taxes jointly. Borrowers can use their income from either 2020 or 2021.
Current students can qualify, but anyone claimed as a dependent will be eligible based on their parents’ income rather than their own.
CUT OFF DATE
Any loans obtained after June 30, 2022, are not eligible.
Those who got Pell Grants can have up to $20,000 forgiven. Pell Grants are federal financial aid for those with “exceptional financial need.” Anyone can check their status on the federal student aid website.
HOW CAN PEOPLE APPLY?
Most qualified people will need to fill out an application with the U.S. Department of Education, which said the forms will be available in the coming weeks. President Biden said no later than the end of the year.
The Education Department said some people, nearly 8 million, may get this forgiveness automatically because it already knows how much they make.
GET A NOTIFICATION
People can sign up on the Education Department’s website to get a notification when those forms are ready.