Here’s who qualifies for President Biden’s student debt relief plan
CLEVELAND, Ohio (WOIO) - President Joe Biden announced Wednesday that he is moving forward with what is being called the “Biden-Harris Administration’s Student Debt Relief Plan.”
The first part of the announcement is that federal student loan payments, which have been suspended for the past two years, will resume in January 2023.
The current pause of payments was set to expire on Aug. 31.
As for forgiveness, $10,000 will be forgiven, but only for federal student loans that are currently held by the U.S. Department of Education.
Loans taken out at banks and private institutions or school do not qualify.
The plan will also forgives $20,000 in Pell Grants, also federal held.
To qualify, an individual cannot make over $125,000 a year, or $250,000 as a household for joint filers.
There is also a chance to have loans wiped out completely depending on where you currently work.
“In addition, borrowers who are employed by non-profits, the military, or federal, state, Tribal, or local government may be eligible to have all of their student loans forgiven through the Public Service Loan Forgiveness (PSLF) program. This is because of time-limited changes that waive certain eligibility criteria in the PSLF program. These temporary changes expire on October 31, 2022. For more information on eligibility and requirements, go to PSLF.gov.”
The Biden plan will also help those with payments when they resume in 2023.
Payments will be capped at 5% of an individuals discretionary monthly income for undergraduate loans.
The current payment is based on 10% of a person’s discretionary income.
For those who make 225% under the federal poverty line, which the plan says is equivalent to a $15 per hour job, payments will be permanently paused.
Anyone who has made payments for 10 years or more will have their balance forgiven completely as long as the outstanding balance is less than $12,000.
The current forgiveness level was after 20 years.
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