Student loan forgiveness applications could open within weeks. Take these 4 steps now to get ready

FINANCE

By : Quick Insurance Guru

Wednesday, 31 August 2022

The U.S. Department of Education may have its application for student loan forgiveness up and running within the next few weeks.

President Joe Biden announced last week that most federal student loan borrowers will be eligible for some forgiveness: up to $10,000

1. Make sure you qualify based on income

if you didn’t receive a Pell Grant, which is a type of aid available to low-income undergraduate students, and up to $20,000 if you did.

The relief will be limited to borrowers who make less than $125,000 per year, or married couples or heads of households earning less than $250,000.

The Education Department will be considering people’s so-called adjusted gross income, or AGI, which may be different than your gross salary.

Will be eligible for the forgiveness based on their loan type because their debt is under what’s called the William D. Ford Federal Direct Loan Program.

2. Ensure your loans qualify

If you don’t want to consolidate your loans, however, the Education Department says it will work in the coming months with private lenders to make sure FFEL borrowers still benefit from forgiveness.

Around 8 million borrowers who’ve been enrolled in income-driven repayment plans may not have to attest their income because the government already has their data.

3. Gather records

When you log into StudentAid.com, the grants tab lets you look up if you received a Pell Grant in your undergraduate years and are eligible for the $20,000 in relief.

Borrowers can sign up now on the Education Department’s website for updates on the student loan forgiveness process, including when the application will be ready.

4. Stay up to date with the process