Since President Joe Biden announced his Student Loan Forgiveness Plan last month, there has been a lot of speculation on how the plan will work. Some borrowers can receive up to $20,000 in forgiveness, but not all are eligible.
The announcement from the White House website gives some details about how it would go into effect.
Student loan payments have been paused since March of 2020, a decision made in response to the pandemic. The pause is set to expire in January of 2023.
The student loans that qualify must be a Direct Stafford loan, or a Subsidized or Unsubsidized Federal Loan. 37 million Americans with student loans fall under this category.
Are there any other requirements to be eligible?
Yes. To qualify for any form of forgiveness, the borrower must make less than $125,000 annually. If the borrower happens to be married or the head of the household, they must make less than $250,000 annually.
The deadline to submit an application for any student loan forgiveness will be on December 31, 2023. To learn more specifics about this plan, visit the Federal Student Aid website here.