Education, Living, Tips & Techniques

What to know about Biden’s Student Loan forgiveness plan

The time to apply is now, people.

words by: Natasha Marsh
Nov 12, 2022

I know I speak for many when I say, not having to pay student loans in the last 2 years has been a life I didn’t think I’d know. As someone who attended undergrad out of state and graduate school out of the country, my student loan debt would make anyone faint. Truly, coming up with a plan to pay it off monthly in tandem with rent, other bills, and an inkling of a savings account for the future, has been my greatest source of anxiety.

 

The issue I have, starting with such large debt, is regardless of how much you pay, the tiresome interest attached makes you feel like your efforts are falling on deaf ears. Regardless of how much I pay — the minimum, under minimum, or more — it’s like I’m drawing in debt. Loan forgiveness is one of the many reasons I voted for President Joe Biden a couple years ago. From day, one the current President made us believe he would take care of student loans. Although he didn’t say he would forgive them all, he made us believe he would try to do something about it.

 

Some might think he has not done enough, to which I would agree. However, his recent announcement of the student loan forgiveness program shows real progress. Originally, President Biden announced to cancel up to $10,000 in student loan debt for individuals making less than $125,000 a year, or as much as $20,000 for eligible borrowers who received the Pell Grant.

 

Who can apply?

But with the application opening just last month, and available until December 2023, federal student loan borrowers can now apply for up to $20,000 in debt forgiveness thanks to the new plan. It’s important to note that only federally held student loans (subsidized loans, unsubsidized loans, parent PLUS loans, and graduate PLUS loans) qualify.

 

Meaning, if you have private student loans or high income (based on 2020 or 2021, whichever is highest), you, sadly, are exempt from debt relief. Officials predict 8 million borrowers will receive debt relief.

 

The application

The application sounds like it would be a lot of work, but it takes less than a minute. (You don’t need all that complicated information you did if you signed up for FASFA.) Simply enter your information (full name, social security number, loan details, address, etc.), and you’ll receive word about the decision within weeks.

 

Once you apply, you’ll receive an email confirmation, and your loan provider will notify you when debt is canceled. For those that apply by mid-November, expect the government to release payments by January, the deadline for the pandemic-related pause.

 

For a little more information about the loan forgiveness program, the FSA actually made it simple. Here’s another question: Will inflation impact loans? Let’s find out together.

 

Photo via Getty Images