The government’s announcement and forthcoming forgiveness of student loan debt is a hot topic right now. Many people have asked me if they qualify, including a regular guest on this podcast, Matt Robison. Join us this week as we discuss the who, what and how’s of student loan forgiveness.
What will you learn from this episode?
- Who is eligible: For the 2020 or 2021 tax years, individuals who make less than $125k in income, taxpayers who are married and file jointly and have less than $250k in income and current dependent college students using parents income with the above income eligibility qualify for student loan forgiveness.
- What is eligible: All federal college loans are eligible as long as they are issued no later than June 30th, 2022 to include Direct Subsidized and Unsubsidized Loans, Direct Grad PLUS Loan, Direct Parent PLUS Loan, Direct Consolidation Loans and Some Federal Family Education Loans (FFEL) are eligible (these loans were discontinued in 2010 but if there is a balance and the loan is not held commercially, it is eligible)
- How: The Department of Education says it’s going to work “quickly” and “efficiently” to set up a simple application process for borrowers to claim debt relief. As of publication, USA Today says the application will be available early this month. That said, nearly eight million borrowers may be eligible to receive relief without filing an application because their relevant income data is already available in the federal system.
- What if you have multiple loans? No matter how many types of federal loans that an individual possesses, there will only be one payment for either $10,000 or $20,000 or less if the loan balance is lower.
- $20,000? How do I qualify for that? Only borrowers with a Pell Grant will have $20k discharged, which represents about 60% of student borrowers. Not sure if that’s you? Sign into studentaid.gov and click “My Aid” to find out.
- Can I get a refund if I made payments during the time the loans were federally deferred? You bet! Contact your loan servicer and request a refund. Borrowers should obtain proof of loan payments that they made during the pandemic starting from March 13, 2020. Once you’ve got that, request a payment refund from your loan servicer.
Learn all this and more on this week’s podcast. It could save you $10,000 or more off your student loan debt.