President Joe Biden cancels $3.9 billion of student loans

Here’s what you need to know and what it means for your student loans

 

The Biden administration announced today that it will discharge all remaining federal student loans for 208,000 student loan borrowers who attended ITT Technical Institute ITT, a for-profit college from January 2005. Through its closure in September 2016.

 

These student loan borrowers will receive a discharge through borrower defense to repayment and don’t need to apply to get their student loans canceled.

 

Biden’s major announcement comes at a critical juncture as he considers whether to enact widescale student loan cancellation and extend the student loan payment clause for millions of student loan borrowers. It is time for student borrowers to stop shouldering the burden from ITTC years of lies in.

 

Since becoming President Biden has canceled nearly $32 billion in student loans, including borrower defense to repayment, which is an Obama-era rule that helps student loan borrowers get student loan cancellation if their college or university closed or misled them.

 

While today’s announcement on student loan cancellation will be automatic, Every Student Loan Borrower won’t qualify.

Am I eligible????

The relief applies to those who earn less than $125,000 per year, or married couples or heads of households earning less than $250,000.

How do I qualify for loans?

The new student loan forgiveness program will apply to all federal student loans. That means that if you meet the requirements, you’ll be eligible for loan forgiveness.

In contrast, private student loans aren’t eligible for forgiveness under this new program.

 

Can I be forgiven a certain amount of debt?

 

Borrowers who received a Pell Grant may be eligible for up to $20,000 in forgiveness. Those who didn’t receive a Pell Grant may be eligible for up to $10,000 in relief.

In a new application, the Department of Education will allow borrowers to enter their income information, request loan forgiveness, and sign up for email updates.

In order to receive updates about the application process, borrowers can register on the company’s website.

How do I get the cancellation?

If you have student loans and are planning to apply for student loan forgiveness, you’re probably wondering if you’ll have to pay taxes.

What are the tax implications of loan forgiveness?

The good news is that student loan forgiveness won’t trigger a federal tax bill. Biden’s forgiveness was incorporated into the American Rescue Plan of 2021, which makes student loan forgiveness tax-free through 2025.

 

The state levies, however, may still be a problem, said Mark Kantrowitz, an expert in higher education.

 

Are there any updates on the payment pause?

 

Biden said the administration will extend the payment pause on federal student loans until Dec. 31, 2023.

 

As of now, this is the seventh extension of the Trump administration’s pandemic-era relief policy.

Thanks for reading

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