Ask Terry Questions Loan relief for current students

Loan relief for current students

By Terry Savage on October 22, 2022 | College Savings / Student Loans

Regarding your discussion on wgn about whether current students are eligible for loan refief:
My daughter is currently a college sophomore. She had loans disbursed in Sept. 2021 for her freshman year tuition. She received the following email (below) from the Dept. of Ed. This says to me that her freshman year loan will be forgiven. Hooray.
Here is the text of the email:
The application for the Biden-Harris Administration’s one-time student debt relief plan is now available, but you don’t need to take any action if you are interested in receiving federal student loan debt relief. We already have the information we need from you.
We will work with your servicer to process any relief for which you’re eligible after November 14, unless you opt out.  If you’d like us to start processing your relief sooner, you can submit an application now. If you already applied and received a confirmation email, you don’t need to re-apply.
If you don’t want debt relief, you have until November 14 to opt out. Here’s how:
If you would like to opt out of debt relief for any reason, including because you are concerned about a potential state tax liability, contact your loan servicer no later than November 14 and tell them that you are not interested in receiving one-time student debt relief.  Don’t know who your loan servicer is? Log in to StudentAid.gov, find “My Aid,” and select “View loan servicer details.” You also can call us at 1-800-4-FED-AID and we will connect you with your servicer. If you have multiple servicers, you just have to tell one of them that you don’t want debt relief.

Terry Says

That’s great — I advise all others to read this:
https://studentaid.gov/manage-loans/forgiveness-cancellation/debt-relief-info#income

It appears that the forgiveness will apply to ALL loans disbursed on or before June 30, 2022 are eligible. The next issue is whether the student will qualify as “independent” and easily fit into the income limits, or a dependent — and qualification dependds on parents’ income. So see the above link.

Of course, as of Friday night the entire program is on hold as a result of a ruling by an appeals court regarding the legality of the program.

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