President Biden’s Federal Student Loan Forgiveness Plan

For those of you who have been taking advantage of the federal student loan relief since 2020, we know you have been anticipating this week’s announcement from President Biden on the Federal Student Loan Re-Payment/Forgiveness plan as you have been preparing to begin your student loan payments again. This payment pause included a suspension of loan payments, a 0% interest rate, and a stopped collection on defaulted loans since the COVID-19 pandemic.

However, earlier this week, President Biden finally announced a three-part plan to aid American’s with federal student loan debt as they continue to recover from the economic strains of the COVID-19 pandemic. Within his three-part plan, he announced that he would be extending the pause on federal student loan repayment “one final time” through December 31, 2022, with resuming payments starting January 2023. He also announced that the Department of Education will provide up to $20,000 in debt cancellation to individuals who received Pell Grants in college from the Dept. Of Education and $10,000 in canceled debt to non-Pell Grant borrowers. In order to qualify for the debt cancellation, borrowers individual income must be less that $125,000 or $250,000 for married couples/head of household. For more granular details on Pell Grants and other items in Biden’s three-part plan, visit the White House fact sheet here.

We know there are many unsure details and unanswered questions from President Biden’s announcement; however, we will continue to monitor more detailed clues and announcements on eligibility, rollout, and claiming relief in the coming weeks. If you have been taking advantage of this federal student loan relief for the last two years and believe that this new forgiveness plan applies to you, let us know and we are happy to help you figure out what your situation will look life. Email us at info@shermanwealth.com with questions or comments.