Student Loan Forgiveness

We may have patrons ask us about the details

You have likely heard that President Biden extended some forgiveness to holders of federal student loans. Here’s an article with the details from the AP: Student loan forgiveness could help more than 40 million.

There are many different arguments both for and against this executive action, but no matter the case, there are many people curious about how they can take advantage of the savings, and we will likely have some people asking us about the details.

Here’s what I could find so far from a specific page at the Department of Education website, https://studentaid.gov/debt-relief-announcement/ about their three part plan:

• Part 1. Final extension of the student loan repayment pause
  • payments will resume in January 2023
  • this is automatic–nothing needs to be done
• Part 2. Providing targeted debt relief to low- and middle-income families
  • the U.S. Department of Education will provide up to $20,000 in debt cancellation to Pell Grant recipients…and up to $10,000 in debt cancellation to non-Pell Grant recipients…if their individual income is less than $125,000 or $250,000 for households.
• Part 3. Make the student loan system more manageable for current and future borrowers
  • the Biden-Harris Administration is proposing a rule to create a new income-driven repayment plan that will substantially reduce future monthly payments for lower- and middle-income borrowers.
    • The rule would:
      • Require borrowers to pay no more than 5% of their discretionary income monthly on undergraduate loans
      • Raise the amount of income that is considered non-discretionary income and therefore is protected from repayment
      • Forgive loan balances after 10 years of payments
      • Cover the borrower’s unpaid monthly interest

To get the full information about what changes apply to patrons and how to take advantage of them we should direct patrons to the Department of Education site linked above, but this post will familiarize you with the broad basics of the legislation.

ADDITIONALLY: the ed.gov site is frequently running slowly due to high traffic volume.