All You Need to Know About Biden’s Student Loan Forgiveness Program
On Wednesday, President Joe Biden unveiled his strategy to reduce student loan debt, which includes extending the pandemic-related payment moratorium and forgiving certain borrowers’ debt.
By extending current forgiveness programs for public sector employees, borrowers who are handicapped, and students who for-profit institutions scammed, the Biden administration has already canceled roughly $32 billion of the $1.6 trillion in outstanding federal student debt.
How Can You Tell if You Received a Pell Grant?
On the Federal Student Assistance website managed by the U.S. Department of Education, student borrowers can view their whole federal student aid history. This contains a record of Pell Grants.
Once you’ve signed onto studentaid.gov with your FSA ID, you can see this information on your aid summary page.
The Institute for College Access & Success (TICAS) vice president Jessica Thompson says you may check here to see if you’ve ever received a Pell Grant.
Here are the amount that would be forgiven and who qualifies.
Who is Eligible for President Biden Student Loan Forgiveness
The scheme covers borrowers of federal student loans.
“In keeping with my campaign promise, my Administration is announcing a plan to give working and middle-class families breathing room as they prepare to resume federal student loan payments in January 2023,” Biden said in a tweet on Wednesday.
Individual borrowers must make less than $125,000 annually, or less than $250,000 annually for couples, to be eligible for the $10,000 forgiveness.
To qualify for the $20,000 forgiveness, borrowers must fulfill those income standards and must have received a Pell Grant in college. Low-income students can use Pell Grants to assist cover the cost of higher education.
What Must I Do to Be Eligible for Loan Forgiveness?
Because the U.S. Department of Education has access to the necessary income data, over 8 million borrowers may qualify for automatic relief.
The Administration will release a straightforward application in the upcoming weeks if the U.S. Department of Education doesn’t have your income data or if you’re unsure if the U.S. Department of Education has your income data.
Before the suspension of federal student loan repayments expires on December 31st, the application will be accessible.
Please sign up at the Department of Education subscription website if you want to get a notification from them when the application is available.
Biden extends the payment moratorium and eliminates up to $20,000 in student loan debt for millions of Americans.
What is a Pell Grant?
According to a Congressional Research Service estimate, 6.3 million undergraduate students will receive Pell Grants, a need-based aid program worth $27 billion in 2020.
According to the research, almost 95% of Pell Grant beneficiaries in the 2017–18 academic year were from households with annual incomes under $60,000. Since the prizes are grants, they are not often required to be repaid until certain conditions are met, such a student’s decision to leave college.
Pell grantees sometimes rely on additional sources of money to pay for college, even though they are not required to repay the grants; as a result, they generally have greater debt than other students. According to one study, students who get Pell grants often graduate with $4,500 more in debt than their peers.
Will the Debt Forgiveness Be Subject to Taxes?
No,the White House has said that the debt forgiveness would not be considered taxable income.
New Development on Student Loan
The Department of Education is also taking action to lower college prices for students and their families and hold schools responsible for cost increases, particularly when they fail to provide students with positive results.
The Department recently revoked authorization for the accreditor that regulated schools implicated in some of the greatest for-profit scandals and has already reestablished the enforcement team in the Office of Federal Student Aid.
The government will also propose a rule to hold career programs accountable for leaving their graduates with excessive debt. Additionally, the Department is announcing fresh measures against universities responsible for the student debt issue.