Student loan forgiveness

[mefordis]

Is there a target date in which the 10k (or 20k for pell grant recipients) will be applied to the student loan balance for those who qualify? Any word on this yet?

 

[Pea-n-Me]

Just googled for you.

”On Friday, administration officials said during a press briefing that an application should be available in early October. Once submitted, the process will take between 4 and 6 weeks, so the administration is recommending borrowers apply by Nov. 15 so that, in theory, their loans can be forgiven before payments resume next year.

In press conference earlier in the week, Biden told reporters that the application would be a "short and simple form," while the Education Department has said it will announce more details on how and when borrowers can apply "in the weeks ahead."

If the department already has your income information from income-driven repayment plans on file, or if you recently filled out a FAFSA, you may be eligible to automatically receive relief. There are nearly 8 million borrowers in that camp, according to the news release.

Since there's currently little official guidance published from the White House or the Education Department, the most important thing borrowers can do for now is check that your information — like your address and email address — is up to date with your loan servicer.

There’s also the added complication that Biden’s plans could be challenged and struck down in court

Robert Kelchen, a professor and head of the department of educational leadership and policy studies at the University of Tennessee, Knoxville, weighed in on the possibility on Twitter.

“Let the lawsuits begin over presidential authority,” Kelchen wrote. “I wouldn't count on forgiveness happening for a while, and it may go to the Supreme Court."

https://money.com/student-loan-forgiveness-timeline-biden/

 

[mefordis]

Just googled for you.

”On Friday, administration officials said during a press briefing that an application should be available in early October. Once submitted, the process will take between 4 and 6 weeks, so the administration is recommending borrowers apply by Nov. 15 so that, in theory, their loans can be forgiven before payments resume next year.

In press conference earlier in the week, Biden told reporters that the application would be a "short and simple form," while the Education Department has said it will announce more details on how and when borrowers can apply "in the weeks ahead."

If the department already has your income information from income-driven repayment plans on file, or if you recently filled out a FAFSA, you may be eligible to automatically receive relief. There are nearly 8 million borrowers in that camp, according to the news release.

Since there's currently little official guidance published from the White House or the Education Department, the most important thing borrowers can do for now is check that your information — like your address and email address — is up to date with your loan servicer.

There’s also the added complication that Biden’s plans could be challenged and struck down in court

Robert Kelchen, a professor and head of the department of educational leadership and policy studies at the University of Tennessee, Knoxville, weighed in on the possibility on Twitter.

“Let the lawsuits begin over presidential authority,” Kelchen wrote. “I wouldn't count on forgiveness happening for a while, and it may go to the Supreme Court."

https://money.com/student-loan-forgiveness-timeline-biden/

Thank you!

So,
Application: fill out in early October.
Payment will be made: between 4 and 6 weeks after.

Apply by Nov. 15 so that, in theory, their loans can be forgiven before payments resume next year.

 

[wvjules]

Log into studentaid.gov. There is information there that may be helpful too.

 

[cvjw]

If this goes to the supreme court, which it most likely will, I would plan on making payments next year.

 

[trip]

How many states are going to count the amount of the "forgiveness" as income?

 

[Lilias]

Given how long it took them to process my PSLF waiver last year, I'm not very optimistic that it'll be all processed by the end of January

 

[mefordis]

How many states are going to count the amount of the "forgiveness" as income?

I read CA will. People need to report it on their state taxes once their loan is adjusted.

 

[Southernmiss]

I can see loan forgiveness counted as income for tax purposes.

Our kids' scholarships were taxable income.

Much cheaper to pay the tax than the tuition.

 

[mefordis]

I can see loan forgiveness counted as income for tax purposes.

Our kids' scholarships were taxable income.

Much cheaper to pay the tax than the tuition.

That's surprising. What kind of scholarship did they receive? My daughter has a merit scholarship which is not taxable.

Maybe it's taxable for students who got more than they needed to pay tuition?

 

[LuvOrlando]

Good plan OP!

I'm sure the iRS will make tax responsibilities plain soon enough, although most people who would get this have income below the threshold for paying taxes, and if above they will be in a very low rate. Pretty sure there are Tax prep businesses that offer free programs to students and low earners etc.
https://www.irs.gov/individuals/free-tax-return-preparation-for-qualifying-taxpayers

 

[mefordis]

Good plan OP!

I'm sure the iRS will make tax responsibilities plain soon enough, although most people who would get this have income below the threshold for paying taxes, and if above they will be in a very low rate. Pretty sure there are Tax prep businesses that offer free programs to students and low earners etc.
https://www.irs.gov/individuals/free-tax-return-preparation-for-qualifying-taxpayers

I'm actually inquiring for a couple of family members. I paid my student loans off in '99, but I'm encouraging them to keep an eye out so they can get some of theirs forgiven. My sister says she'll believe it when she sees it, though.

 

[LuvOrlando]

I'm actually inquiring for a couple of family members. I paid my student loans off in '99, but I'm encouraging them to keep an eye out so they can get some of theirs forgiven. My sister says she'll believe it when she sees it, though.

We would gain nothing but I do know a number of people who can have totally different lives if it works so I'm legit rooting for everyone!


What's nice about on here is it is a useful clearinghouse of information and how to tips.

 

[xipotec]

How many states are going to count the amount of the "forgiveness" as income?

17 thereabouts so far….mostly along political lines.

 

[dreamer17555]

If this goes to the supreme court, which it most likely will, I would plan on making payments next year.

My instinct says if it gets delayed they will extend the pause again for those who applied for forgiveness. I don't see them restarting payments for those who apply by Nov 15th if they can help it (and since they can extend the pause I am betting they go that course if they must).

 

[sksjasams]

Here is a very helpful link with several faqs
https://studentaid.gov/debt-relief-announcement/one-time-cancellation

 

[cvjw]

And just like that, the plans have changed and millions of borrowers have been dropped from the program. All who are applying for debt forgiveness need to check the new rules.

 

[sksjasams]

And just like that, the plans have changed and millions of borrowers have been dropped from the program. All who are applying for debt forgiveness need to check the new rules.

Can you please post a link? Thank you!

 

[mefordis]

From what I understand:

As of Sept. 29, 2022, borrowers with federal student loans not held by ED cannot obtain one-time debt relief by consolidating those loans into Direct Loans.

Borrowers with FFEL Program loans and Perkins Loans not held by ED who have applied to consolidate into the Direct Loan program prior to Sept. 29, 2022, are eligible for one-time debt relief through the Direct Loan program.

ED is assessing whether there are alternative pathways to provide relief to borrowers with federal student loans not held by ED, including FFEL Program loans and Perkins Loans, and is discussing this with private lenders."

 

[Mackenzie Click-Mickelson]

And just like that, the plans have changed and millions of borrowers have been dropped from the program. All who are applying for debt forgiveness need to check the new rules.

It is true but not as many as one would think.

"The student loans that are guaranteed by the federal government but held by private entities account for a relatively small, and shrinking, subset of all outstanding federal student debt. They comprise just several million of the roughly 45 million Americans with federal student loans."

Either way it's really crappy to do this. As I understand it legal action concerns from the private banks were suspected to be a primary factor. So reading the various stories it was a preventative move.