Biden’s new student loan forgiveness plan! Check if you qualify or not!

On Wednesday, President Joe Biden announced his plans to address student loan debt, including debt forgiveness for certain borrowers and extending the pandemic-related payment pause.

Biden canceled $32 billion of the $1.6 trillion student debt by expanding forgiveness programs for public-sector workers, disabled borrowers, and students defrauded by non-profit colleges. 

Student loan forgiveness!

A federal Pell grant is only given to undergraduate students who display exceptional financial need and have not earned a bachelor's, graduate, or professional degree and does not have to be repaid.

Pell grants cover a third of the cost of a four-year public college degree, which led to increased borrowing. Individual borrowers less than $125,000 yearly and married couples who make less than $250,000 will have up $10,000 of their federal student loan debt forgiven if they don’t receive Pell grant as undergraduate students will have up $20,000 of their student loan debt. 

Add Block

Eligible borrowers!

FSA says 8 million borrowers may be able to receive debt forgiveness automatically because the Department of Education already has their income information. In the coming weeks, Biden will launch an application for borrowers to provide their income. On 31st December, the application will be available before the federal student loan repayment pause ends. 

Future payments!

Until 31st December 2022, the student loan repayment will pause, with repayments starting in January 2023. A proposing rule was created by the Biden administration to create a new income-driven repayment plan in which borrowers pay no more than 5% of their monthly income on undergraduate loans that decrease from the current 10% threshold. As per the rule, the amount of income gets increased, which is considered non-discretionary income. No borrowers who can earn below 225% of the federal poverty level will have to make a monthly payment. 
Borrowers with loan balances of $12,000 or less would be forgiven after ten years of payments instead of the current 20-year mark. It was under the proposed new income-driven repayment plan. To prevent a borrow loan balance from growing while the individual makes monthly payments under the proposed rule, the Biden administration covers unpaid monthly interest. It was even the monthly payment is $0 due to the borrower’s income level.