ADHD Money Talk We All Want Forgiveness, Even Our Student Loans
President Biden announced a plan on August 24, 2022, to forgive student loan debt through the end of December 2022, with payments resuming in January 2023.
- To be eligible for the $10,000 debt cancellation, your annual income must have fallen below $125,000 (for individuals) or $250,000 (for married couples or heads of households)
- If you received a Pell Grant in college and meet the income threshold, you will be eligible for up to $20,000 in debt cancellation.
- Some of the changes originally made by the Public Service Loan Forgiveness (PSLF) Waiver will become permanent provisions of PSLF, even after the waiver ends on October 31, 2022, and will be publicized through an awareness campaign aimed at eligible individuals. These changes will involve allowing credit for late or lump sum payments and deferment or forbearance for people with qualifying employers
- Another newly proposed rule not yet implemented is an income-driven repayment process known as the IDR plan, which will limit payments on federal undergraduate loans to 5% of the borrower's discretionary income and forgives loans of less than $12,000 after ten years of payments.
With an estimated 43 million student loan borrowers in the United States, this relief plan has the potential to positively impact a significant number of households.
Resources:
https://www.gobankingrates.com/taxes/filing/13-states-tax-student-loan-forgiveness
https://www.kitces.com/blog/biden-student-loan-debt-forgiveness-relief-plan-2022-eligibility-income-limits-pell-grant-payment-freeze-pslf-idr
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