The U.S. government announced student loan forgiveness
On August 24, President Joe Biden announced the "Student Loan Relief for Borrowers Who Need It Most" program, which consists of creating relief for student loan debtors with incomes of less than $125,000 per year.
According to data provided by the White House, the total costs of public and private universities have tripled since 1980. In addition, the Department of Education indicates that more than 30% of the student community is unable to complete their degree, and the main reason is the high cost of tuition, considering that the credit history of students in default is affected in the future at the time of professional development.
The main beneficiaries of this economic relief will be those who belong to the Pell Grants program, which provides assistance to undergraduate students with fewer resources to be able to complete their degrees. The financial aid will be up to $20,000 for all those who belong to the program and up to $10,000 for those middle and working class people who are not part of the Pell Grants.
This benefit of student debt forgiveness is promoted by the Federal Government, so all U.S. citizens may apply for it. If you are a foreigner, you should contact your academic institution to determine if you are eligible. Students who are declared as dependents by their parents will be considered for debt relief depending on their parents' income.
It is important to note that the pause in the payment of federal loans and the zero percent (0%) interest rate, which many students benefited from, has been renewed until December 31, 2022. Therefore, we recommend (i) preparing for the payment of loan installments; (ii) updating your information on your loan servicer's website and your profile on StudentAid.gov; (iii) consulting the Student Aid loan simulator; and (iv) if applicable, requesting an income-driven repayment plan (IDR).
The basic requirements to receive financial aid for student debt are:
- Income less than $125,000 (for individuals) or $250,000 (for households or married couples).
- Have received a Pell Grant in college for the debt cancellation benefit of up to $20,000 or meet the income limit for the debt cancellation benefit of up to $10,000.
- Be pursuing or have been accepted into an eligible degree or certificate program.
- Maintain adequate academic progress.
If you are not part of the program and wish to qualify for the new student aid, you only need to submit the application and the government will evaluate your socioeconomic level in order to determine if you are eligible as a beneficiary along with the amount of the benefit.
To know all the requirements or to find out if you are eligible, you can consult the following link: https://studentaid.gov/debt-relief-announcement-es/
We hope this information has been beneficial to you. If you think you can take advantage of this benefit, contact us and we will gladly assist you.