President Biden has announced a Student Loan Forgiveness for Borrowers who need it the most. We are learning more each day since it’s in the early stages, and here is what we know so far.
On Aug. 24, 2022, the Student Debt Relief Plan was announced.
- It cancels $10,000 in federal student loan debt for borrowers making under $125,000 a year or couples making less than $250,000 a year.
- If Pell Grants were received and the borrower makes less than $125,000 a year, or $250,000 for couples, they can qualify for a total forgiveness of $20,000.
- The Department of Education will use adjusted gross income from Form 1040 from either tax year 2020 or 2021. most borrowers won’t have to “apply”.
- Borrowers employed by non-profits, the military, or federal, state, Tribal, or local government may be eligible to have all their student loans forgiven through the Public Service Loan Forgiveness Program.
- Canceled student debt is not subject to federal income tax (American Rescue Plan).
- The pause of federal student loan repayment will be extended one final time through December 31, 2022.
As more information comes out on this, we will keep you updated. Please feel free to contact theKFORDgroup at 210-340-8351 if you have any questions or concerns.