President Biden’s August 24, 2022 announcement regarding federally-held student loans has created questions for many student loan borrowers. With the start of a new academic year and the influx of borrows visiting the federal websites, it has been hard to access the information that you may need in order to see how these student loan changes may affect you and your family. Below are the main points of the announcement, along with resources to help you find information on your student loans:
- The student loan pause on repayment and interest accrual for federally-held student loans has been extended until December 31, 2022.
- Loan cancellation has been capped at $10,000 for single borrowers making less than $125,000, or households earning less than $250,000. The relief includes current students and borrowers who have federally-held undergraduate, graduate, and Parent PLUS loans where the first disbursement was on or before June 30, 2022.
- Borrowers who were dependent students in the 2021-22 year will be eligible for relief based on parental income, rather than their own.
- Borrowers who fall under the income caps and who received Pell Grants in college will receive an extra $10,000 – totaling $20,000 in forgiveness. At this point we do not have information regarding when or how much a student must have received in Pell Grants to qualify.
- It is possible that if you filed a 2021-22 FAFSA, you may be eligible to receive automatic relief because your income data is already available to the Department of Education. Other borrowers may be required to complete an application in order to receive the relief benefit. The best way to keep up with the latest news regarding application information would be to sign up for notifications at the Department of Education subscription page.
- The Office of Federal Student Aid (FSA) has also provided a webpage with answers to frequently asked questions.
It is important to be informed as more information is rolled out by the Department of Education in the months to come. They will be your best resource to ensure that you don’t miss out on any relief benefits that may be available to you. You will also want to make sure that you know who your loan servicer is so that you are ready to begin loan repayment in January 2023. You can visit the FSA website if you have questions regarding who your loan servicer is. The FSA website is a great resource for all things financial aid.