Do you also want to apply for Biden Student Loan?
It’s not for everyone.
President Joe Biden announced on Wednesday that his administration is forgiving student loans of up to $20,000 each for those falling into a certain income bracket.
The move could potentially increase support for his fellow Democrats in the November congressional elections, but some economists said it may fuel inflation and some Republicans questioned whether the president had the legal authority to cancel the debt. Biden’s plan makes 43 million borrowers eligible for some debt forgiveness.
What are the details of this plan? Who is eligible for it?
Here are some frequently asked questions about Biden’s student loan forgiveness that will help provide more information about the plan and who is eligible for it.
What is the plan exactly?
The three-part plan is designed to assist working and middle-class federal student loan borrowers in transitioning back to regular payment as government support related to the pandemic expire.
First, the Biden administration will automatically pause payments and interest accrual on all federally held student loans through September 30, 2021.
Second, the plan will lower monthly payments to $0 for most federal student loan borrowers for six months.
And finally, the Biden administration will forgive $10,000 in student debt for federal student loan borrowers.
How will the plan work?
The Biden administration will extend the current student loan installment moratorium until December 31, 2022, with payments resuming in January 2023.
Who is eligible for the plan?
The plan forgiving $10,000 of debt for borrowers with household incomes below $100,000 and $5,000 for those with incomes between $100,000 and $250,000. Forgiveness would be phased out for higher earners. Public service workers, including teachers, would get their debt forgiven after five years.
Do borrowers need to take any action?
No. The moratorium will go into effect automatically.
How do I apply for a Biden student loan?
To apply for forgiveness under the plan, borrowers would submit an application to their loan servicer. The Education Department would then verify that the borrower meets the eligibility requirements and direct the servicer to forgive the debt.
How do I know if I’m eligible?
You can check your eligibility by contacting your loan servicer or by visiting the Department of Education’s website.
When will the forgiveness take place?
The forgiveness will take place over a period of five years.
I have private loans. Am I eligible?
Biden’s plan only applies to federal student loans.
I’m already in an income-driven repayment plan. Do I still need to do anything?
If you’re in an income-driven repayment plan, you may be eligible for forgiveness after 20 or 25 years (depending on the plan).
What if I’m not eligible for full forgiveness?
If you’re not eligible for full forgiveness, you may still be eligible for partial forgiveness.
How many students will benefit from this program?
According to the US Department of Education, nearly 80 lakh students will benefit from this program.
What if a borrower’s income data is not available?
The government will launch a simple application in the coming weeks before the moratorium ends.
Are there any other student loan forgiveness programs available?
Yes, borrowers employed by non-profits, the US military, or the US federal, state, Tribal, or local governments may be eligible for the Public Service Loan Forgiveness (PSLF) program.
What is Public Service Loan Forgiveness (PSLF)?
The Public Service Loan Forgiveness (PSLF) Program forgives the remaining balance on your Direct Loans after you have made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer.
According to the official government website, the rule would require borrowers to pay no more than 5 percent of their discretionary income monthly on undergraduate loans. This is down from the current 10 percent. Further, the rule will also raise the amount that can be considered as discretionary income.
In conclusion, Biden’s plan is a great way to help reduce student loan debt. It will provide much-needed relief to millions of borrowers, and could help 20 million get their debt erased entirely. This is a huge step in the right direction, and we hope to see more progress on this issue in the future.
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