In the ever-changing world of student loan forgiveness, and ongoing legal battles, President Biden says borrowers in need and who have been waiting may begin to get what they need when he signs an executive order and one-time cancellation initiative within two weeks.
This is according to a report on Oct. 28 and if you fall into that category and/or are a borrower, here’s what you need to know before you borrow.
Know These Facts
First, a federal court has temporarily blocked student loan forgiveness for millions of borrowers.
It’s been said that under Biden’s one-time student debt relief program, around 40 million people with government-held student loans will be eligible to get up to $20,0000 in student debt relief.
Also, qualifying single and joint filers must earn less than $125,000 in 2020 or 2021 or between $250,000 and $500,000 if filing jointly.
Those who never got a Pell grant can earn $10,000 in debt relief.
But be aware that a series of legal challenges filed by Republican politicians and conservative legal organizations were tossed out in late October, and a group of Republican-controlled states appealed a decision to stop the plan. Also, the appeal court ordered a temporary halt and a final verdict is expected soon, possibly within weeks, according to reports.
“We’re gonna win that case,” predicted Biden in public remarks, according to reports, “I think in the next two weeks you’re gonna see those checks going out.”
Borrowers won’t get student loan forgiveness checks, as any loan forgiveness would be applied to loan balances.
While the Biden administration has been unable to enact any student loan relief during the current court battle, the Education Department reports it is accepting applications for debt cancellation.
That application, which went live on Oct. 28 according to online reports can easily be completed without having to log in or submit supporting documentation.
“We encourage you to apply if you are eligible,” the Education Department in a message on the application website and according to reports. “We will quickly process discharges when we can do so.” Over 20 million borrowers have already submitted student loan forgiveness applications, according to Education Department officials.
The 8th Circuit’s administrative stay is “temporary” and “does not stop the Biden Administration’s efforts to provide borrowers the opportunity to apply for debt relief,” said Education Secretary Miguel Cardona in a tweet. “We are moving full speed ahead to be ready to deliver relief to borrowers who need the help.”
Do note that there are other types of student loans besides federal ones.
Reports said Biden was optimistic and that other important federal financial aid programs were not impacted by the ongoing legal challenges against the loan forgiveness program.
The deadline for applying for the Public Service Loan Forgiveness program was extended until Oct. 31.
Meanwhile, the U. S. Department of Education launched the initiative that could potentially benefit tens of thousands of federal student borrowers who face financial hardship.
Stay tuned as this battle rages on.
Source: Forbes.com, other sources