The cancellation of thousands of dollars in federal student loan debt and an extension of the
student loan payment moratorium were both announced by Vice President Biden. While this news relieves many Americans' financial concerns, it also raises some doubts. Let's examine the implications of this upgrade for you and your family.
Do you qualify for loan forgiveness for student loans?
In general, you qualify if:
You are paid less than $125,000 annually.
Your household income is less than $250,000 and you are married.
Any federal student loans you have are being kept by the Education Department (private loans are not eligible).
Graduate student PLUS loans and federal parent PLUS loans are also eligible for forgiveness. Find out more about qualification.
What sum of debt will be discharged?
You could receive up to $20,000 in loan forgiveness if you were awarded a Pell Grant. Other borrowers are eligible for forgiveness of up to $10,000.
What must you do to obtain the pardon?
Before the year is over, an application will be accessible, according to the Education Department. Currently, you can:
Register for application process updates at www.ed.gov/subscriptions.
Tell your loan servicer how to reach you so they can provide you advice and instructions.
To clarify your rights and any necessary actions, speak with your LegalShield attorney.
Will taxes be generated by the loan forgiveness?
Federal taxes won't be due as a result of the loan forgiveness proposal, but it's possible that state levies could still be due. To be certain, check with your LegalShield attorney before submitting your state tax return.
How has the payment pause progressed?
The payment suspension, which was put in place in March 2020 during the COVID-19 epidemic, will now last until December 31, 2022. The halt will not be prolonged again, according to President Biden, and payments will start up again in January.
What assistance can your LegalShield attorney provide for student loan forgiveness?
Having legal assistance when navigating a new process can be really beneficial. Here are some methods your LegalShield attorney can help you:
Give advice on your rights as they pertain to your state.
Assist you in determining your eligibility and the next steps.
Explain complicated legalese in applications.
Assist you in handling any legal issues that arise throughout the procedure.