Biden's Latest Student Debt Forgiveness Plan: What You Need to Know
A Breakdown of the New Relief Measures
President Joe Biden has announced a new plan to forgive student debt for millions of Americans. The plan includes the following key provisions:
Forgiveness for Pell Grant Recipients
Borrowers who have received Pell Grants will be eligible for up to $20,000 in debt forgiveness if their school is on the federal Public Service Loan Forgiveness (PSLF) list.
Forgiveness for Non-Pell Grant Recipients
Borrowers who have not received Pell Grants will be eligible for up to $10,000 in debt forgiveness if their school is on the PSLF list and their income is below $125,000 for individuals or $250,000 for couples.
Income Eligibility
To be eligible for debt forgiveness under the new plan, borrowers must have a household income below $125,000 for individuals or $250,000 for couples.
Timeline for Forgiveness
The timeline for debt forgiveness under the new plan is as follows:
- Borrowers who have already applied for PSLF forgiveness will have their applications processed automatically.
- Borrowers who have not applied for PSLF forgiveness will need to submit an application by October 31, 2023.
- Debt forgiveness will be applied to borrowers' accounts in 4-6 weeks after their applications have been processed.
Implications for Monthly Payments
For borrowers who are currently enrolled in an income-driven repayment (IDR) plan, the new debt forgiveness plan will have the following implications for their monthly payments:
- Borrowers who have their loans forgiven under the new plan will see their monthly payments reduced by the amount of debt that was forgiven.
- Borrowers who do not have their loans forgiven under the new plan will continue to make their current monthly payments.
Additional Resources
If you have any questions about the new student debt forgiveness plan, please visit the following resources:
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