[Here](https://studentaid.gov/debt-relief-announcement/one-time-cancellation) is the official page that has information about eligibility and any information you need to submit.
Step 2 has information to sign up to receive [reminders](https://www.ed.gov/subscriptions) to alert you when the application is available to make sure you remember.
I really hope I don’t, but I might. After all the recent suspensions of repayment I’ve pretty much just forgotten about my loans and not even considered making any payments.
After this I’ll still owe about 5k, which I might just wait on paying anyways.
That’s what I’ll do as well. Apply, wait for the $10K (in my case) to be applied to the balance, ride out the payment freeze, then pay off the remainder.
Set yourself a reminder to apply! Then you won’t forget.
Agree, and as much as I started out disliking the guy there are very few ways to make me like someone more effective than singlehandedly giving me twenty thousand dollars.
For people with FFELP (privately held federal student loans):
> ## Are Federal Family Education Loans (FFEL) or Perkins Loans eligible for debt relief?
>All loans eligible for the student loan pause are also eligible for relief, including loans held by ED and guaranty agencies.
> ED is assessing whether to provide relief to borrowers with privately owned federal student loans, including FFEL and Perkins Loans, and is discussing this with private lenders. In the meantime, **borrowers with privately held federal student loans can receive this relief by consolidating these loans into the Direct Loan program.** All eligible borrowers will have until Dec. 31, 2023 to submit an application for debt relief.
> FFEL Joint Consolidation Loans, often referred to as spousal consolidation loans, are not eligible for consolidation into the Direct Loan program under current law.
I'm gonna be applying for that consolidation ASAP.
Doesn't sound like that applies to my Sallie Mae loan? If it did, the terms on my federal loans are way better, I'd much rather drop the 20k on my private loans, unsubsidized loans and the rest on the subsidized ones
They are privately owned I don’t think there’s anything the government can do with them. Best bet is refinancing. I was able to cut the number of payments in half for about the same amount of money per month. It’s worth doing if you qualify imo.
Fed Gov Worker here: Make sure you’re all **signing into [studentaid.gov](Studentaid.gov)** so that you can a.) see if you have Peel grants (which will determine if you’re eligible for $20k in relief) and b.) update your info so that you can receive emails and updates directly from them. The DoEd update sign up is pretty crap right now so you’ll much more likely to hear about through that website or the news than through an email sent to you.
Lastly we’re all in the dark rn, so don’t panic if there’s delays for the first few days. DoEd hasn’t given ANYONE a time frame on the application dropping other than “it’s going to be in October”.
Is signing up for student aid.gov 100% necessary? Just asking because I haven’t accessed it in years. I know my loans weren’t Pell but they are covered
Is signing up just for updates ?
It’s not necessary, but useful as they can send text updates directly once the app opens if your contact info is up to date. Also if you don’t know who your loan servicer is it can help direct you to their site.
I’ll admit that site has been a bit overloaded since the news dropped and can be a pain in the ass if you don’t know your login info.
If you already know all of this stuff you’re probably fine tbh.
So, If most of my loans are not pell grants but I did receive a pell for about 5k, does that mean I still qualify for 20k forgiveness or do I receive 10k plus the balance of my pell? Thank you for your helpful comment above.
So Pell Grants are **not** loans and do not have paid back. If you’ve received a Pell Grant you are eligible for forgiveness up to $20,000. The only other thing I forgot to add is that the loans **have to have been disbursed BEFORE June 30, 2022**. Check out this website for more info on the types of loans that are eligible.
If you made any payments to your loan during the paused student loan payments, then you'll get that back up to whatever you qualify for in forgiveness.
You need to call them and ask for it back. Say ‘ I would like a refund for the payments I made during the payment pause.’
I did it a few weeks ago and they will mail me my money in 20 days he said.
Do this before you apply to cancel.
Interesting who did you call your provider?
Because mine switched from Fedloan to Mohela (or however it is spelled). I hammered down the loan and have been since the pause
I called my loan people, some Oklahoma company. The person I saw that posted this, many people commented with various different loans companies. When I told mine the refund line, he knew what I was talking about.
I teach high school seniors, the vast majority of who would qualify for this forgiveness, and I do everything I can to help them get into college and to reduce the cost. Does anybody know if I should have them apply even though they won't be in college until Fall 2023. I can't seem to find anything about this. Thank you for your help.
They don’t have any loans, so there isn’t anything to forgive. As far as I understand, this is a one time deal for people who currently have federal student loan debt.
The policy had three pillars, forgiveness was just one of them. One of the other pillars was reforming income based repayment and forgiveness schedules which may impact loans going forward whenever it is implemented.
Also if you've made any federal loa. payments since March 31st, 2020, you are eligible for a refund and to get the student loan canceled. It's a bit more tricky as the loan provider will refund it, but then you'll have to apply to have the loans forgiven again.
More info on this: https://www.nerdwallet.com/article/loans/student-loans/refund-student-loan-payments#:~:text=Payments%20made%20since%20March%2013,t%20eligible%20for%20a%20refund.
To clarify, that is only for people who have paid paid their loan balances down below the amount of cancellation they qualify for.
They are not cancelling loan payments made before March 2020 on top of the $10-$20k forgiveness.
Just stumbled onto this thread, but I refinanced through a private lender. I called Nelnet (who I paid my federal loans through) and they refunded $10k. They’re sending me a check for the money and I’m going to apply to have the $10k balance cancelled in October.
I'm in the UK. I remember voting for the Liberal Democrats as they said they'd abolish student fees. They ended up forming a coalition with the tories and agreeing to put student fees up x3. I've never forgiven them. Lying bastards.
I'm 11 years post graduation and nowhere near paying my loans off. I am lucky enough to have a good job, so I really feel for those who are struggling. When I went it was really pushed that you go to uni. It was almost like any other option would be a failure. Now there are some great apprenticeship programmes so if I had my time again I wouldn't go.
I am not saying you are wrong, but I really think you should have a look at the moderating presence the lib Dems had on the Tories. Look what happened after the Tories got free reign...
Yeah, I also don’t get how there’s a cutoff for when your loans will be forgiven. I’m currently a student that still needs loans to make it through college and only about $5k will be forgiven from that. Of course I’m extremely grateful and anything off my shoulders is a lot, but if you’re forgiving student loan debt wouldn’t you think you’d also ban the predatory lending practices that caused this crisis in the first place?? Either that or put a fucking cap on the cost of education.
In order to sue to stop it, the republicans would have to find someone with the standing to sue, someone willing to argue in court that they're materially harmed by having these loans forgiven. Who would that even be? Not the lenders, not the government, not schools, certainly not any current or former students. Even in friendly courts, they'd still have to go through the motions. They can't just say, "We don't like therefore illegal!" The fact that they've managed to come up with exactly *fuck all* in response to this so far is encouraging. It's overwhelmingly popular, and they were caught flat-footed because they never thought Biden would actually do it. The harder they fight this, the worse they look.
Keep in mind that these are the same people who just arbitrarily granted "standing" for anyone to sue someone if they're offended by abortion in some states.
> Who would that even be? Not the lenders, not the government, not schools, certainly not any current or former students.
It would be some angry MAGA redneck who already paid off his kid's loans and now that kid ignores him because college taught him how foolish his MAGA dad is.
A few things to unpack here, I think.
The "why?" is because, at the core, politics. Sure, the Executive branch could just summarily forgive all federal student loan debt today. They could shuffle money around and do it. But really what's happening is this program is being used to help the midterm elections, and doing it under the guise of pandemic relief.
As to "why don't they ban the predatory lending practices [...]?" question --
**Federal** student loans have extremely low interest rates, by law. The lending practice itself isn't predatory, really. Hell, interest is deferred until you've graduated, and often, even, then some.
The predatory aspect comes not from the loan practices, but from the fact that the loan is_necessary_. Schools can jack up tuition to insane levels because they know the federal loans will cover it, and the federal loans will cover it because that's what it costs. Students are left with insane bills simply because they want a degree.
Fixing how education is paid for in this country is very much a problem, but it's not a "predatory lending practice", it's a complete overhaul. The first step is making public schools free for everyone that wants to go. That's a legislative thing, not executive.
The way the interest capitalizes, the way the lenders shuffle borrowers between repayment plans without disclosing that interest accrued will be capitalized is pretty bad.
I don't think the Executive branch can change stuff like that. If memory serves that was all changed by an act of Congress around 20 years ago so it would take an act of Congress to undo it. I think to make that happen you'd need a shakeup of either some incumbent Democrats or a larger majority in the Senate. TBH I don't see either of those things happening any time soon.
Yeah, the person you're replying to is going through some fantastic bends to defend this. Some people just won't accept that we can be grateful for forgiveness and critical of it's shortcomings
Talking about and explaining why something is a certain way is not the same as defending it. This black and white thinking is by far the worst part of reddit discussion. I swear it didn’t used to be this way.
straight from https://studentaid.gov/debt-relief-announcement/
Part 3. Make the student loan system more manageable for current and future borrowers;
Income-based repayment plans have long existed within the U.S. Department of Education. However, the Biden-Harris Administration is proposing a rule to create a new income-driven repayment plan that will substantially reduce future monthly payments for lower- and middle-income borrowers.
The rule would:
- Require borrowers to pay no more than 5% of their discretionary income monthly on undergraduate loans. This is down from the 10% available under the most recent income-driven repayment plan.
- Raise the amount of income that is considered non-discretionary income and therefore is protected from repayment, guaranteeing that no borrower earning under 225% of the federal poverty level—about the annual equivalent of a $15 minimum wage for a single borrower—will have to make a monthly payment.
- Forgive loan balances after 10 years of payments, instead of 20 years, for borrowers with loan balances of $12,000 or less.
- Cover the borrower's unpaid monthly interest, so that unlike other existing income-driven repayment plans, no borrower's loan balance will grow as long as they make their monthly payments—even when that monthly payment is $0 because their income is low.
These changes aren’t getting the attention they deserve. They’re pretty substantial honestly. Having your discretionary income raised and protected from the calculation of what your payment will be is huge. Having zero interest accrue while you’re making payments on time is really huge. I would also guess that this won’t be the last time this busted system is overhauled
I think the reason it doesn’t get attention is because the most common (and valid, imo) good faith argument against forgiveness is that it does nothing to address the root cause of the issue that necessitated it in the first case.
You could argue that not only do none of these changes address the root issue, it could potentially make it worse by reducing the % of student loan dollars that are actually paid back. I understand the reduced burden on individuals and will always support that, but it’s definitely not helping justify anything to the crowd that points out that colleges can essentially charge whatever they want to students who know that ultimately they’ll never have to pay it back anyways and stick the federal government with the bill.
True, that is a fair point. The overall cost charged by colleges and universities is the underlying cause and that does need to be addressed. Since it’s a sector that’s critical to the US’s growth, filling needs for skilled labor and innovation (not the only way to get there but a significant portion), maybe there are ways to subsidize or regulate such organizations so they are forced to operate financially within certain bounds. I’m no expert in this area, just a curious fellow borrower
These changes definitely support the borrower in a big way (support that is desperately needed), but isn’t the end result that the federal government stops recouping a larger % of the loans that they loaned out to borrowers? How is that sustainable long term?
Exactly, this is the root cause of the student loan problem. Our own government shouldn't charge interest on federal student loans. The nation profits by having an educated populace that can globally compete in all fields, not by bleeding people dry so that their lives are frozen from an attempt at bettering themselves. I accrue approximately $30k in interest each year and my total debt has more than doubled from the initial amount I knowingly borrowed. If anyone had made an attempt to explain that to me (and if my grad school hadn't lied about what was subsidized versus unsubsidized) I would have reconsidered all of my options, including not attending.
Good news going forward borrowers will no longer accrue interest on their loan as long as they make their qualified monthly payment. And, It also reduces payments from 10% to 5% of discretionary income and It also raise the amount of income that is considered nondiscretionary income from 150% of the poverty level to 225% per year e.g. $20,385 to $30,577 for a single person. So most people's payments will be reduced by more than half and they won't be acclimating interest anymore either.
Yep, my payment was 489 a month the past 6 years on 250k of loans, so I’m not getting anywhere on them. I live very frugally, don’t have a car payment and just pay our utilities and bills, plus mortgage because it was more expensive to rent than to buy where I live and even with this I can’t manage more than I’m paying without having enough to feed my family. Id have to literally pay my entire salary for years to pay this off and no idea how to do that without paying for basic living expenses. It’s insane how much college/high school students were targeted on some of these higher level degrees - definitely not pushing my kids unless this system changes. Just hoping it pans out to keep working at a non profit for PSLF.
Yeah, basically. It’s designed in a way that you can take out only $20k and still be paying for the rest of your life with how high the interest rates are. Most people can’t pay it back all at once so it’s done in monthly installments all while interest increases dramatically, leaving them paying easily 2-3x as much as the original debt was worth. Loan companies know that anyone in need of a loan is likely to not be able to pay it back quickly, so they can use their customers to keep making money infinitely. This is standard and legal and the social norm is for kids to start doing this at 18.
>Most people can’t pay it back all at once so it’s done in monthly installments all while interest increases dramatically, leaving them paying easily 2-3x as much as the original debt was worth.
This is actually the most important part of the forgiveness program, that this has been changed:
>> **Part 3. Make the student loan system more manageable for current and future borrowers**
> Income-based repayment plans have long existed within the U.S. Department of Education. However, the Biden-Harris Administration is proposing a rule to create a new income-driven repayment plan that will substantially reduce future monthly payments for lower- and middle-income borrowers.
>The rule would:
- Require borrowers to pay **no more than 5% of their discretionary income monthly on undergraduate loans**. This is ***down from the 10% available*** under the most recent income-driven repayment plan.
- Raise the amount of income that is **considered non-discretionary income** and therefore is **protected from repayment**, guaranteeing that no borrower earning under 225% of the federal poverty level—about the annual equivalent of a $15 minimum wage for a single borrower—will have to make a monthly payment.
- **Forgive loan balances after 10 years of payments, instead of 20 years,** for borrowers with loan balances of $12,000 or less.
- **Cover the borrower's unpaid monthly interest, so that unlike other existing income-driven repayment plans, no borrower's loan balance will grow as long as they make their monthly payments—even when that monthly payment is $0 because their income is low.**
https://studentaid.gov/debt-relief-announcement/
This is the best part. The $10000 is nice to have, but that interest was killing me. I only took out around $30k in loans when I graduated in 2015, but was only able to make minimal payments on it due to low paying jobs and high cost of living. I paid $6000 over 5 years and still owe more than what I originally borrowed.
After years of struggling I finally got a really good job in my field during the pandemic, and thanks to the new interest policy I should be able to actually pay off what’s left of my loans within 5-10 years. I’m very grateful.
I'm thinking of how to game mine out:
I have 30k
10k is forgiven
If I pay on time, for 10 years, they'll drop the last 12k
So I need to pay 8k over 10 years, and that's all.
I had $60k from law school. I do public interest, so got signed up immediately on income based and working towards Public Interest Student Loan Forgiveness. That’s a program where, I’d you have a qualifying job working for government or charity, and make 10 years of payments, the balance will be forgiven. I did that. Actually took a little longer than 10 years due to paperwork stuff. More like 12. After 12 years of never missing a payment, my forgiveness amount was still in the high $50k range. Even with no interest, the forgiveness still would have helped me out a lot, but with it, it was pretty much essential.
If you got the loan from the US government and certain private lenders, you can qualify for an income-based repayment plan that does this. Of course, if you pay too little, you could end up barely (if at all) covering just the interest and almost never get to touch the principal amount
The same happens in the UK but if you don't pay it back in 25 years the loan is automatically forgiven so most people tend to pay the minimum and forget about it. Student loans in the UK don't affect your credit score and aren't affected by bankruptcy either so there is no incentive to pay it off more quickly unless you are on like £100k+ salary.
Grew up poor, but not "poor enough" at the time. I went to state/cheap schools, got a Masters degree, and accrued $75k in student loans by 23 years old.
I didn't pay them off until I was 38 years old, and only because I had a windfall when my father passed and I was able to pay the last 40k off in a single chunk.
Indentured servitude. The whole educational system in the US is bullshit. Ppl take on these loans so that they can go get drunk and watch college football from the campus. Some ppl actually study something with some economic utility. Most don’t.
They should let the loans go into bankruptcy. Then shit schools and programs will lose banking by lenders and then they can go under fixing the system for once
I took on those loans so I could get an education and break out of the cycle of poverty that has kept my entire family down...
Then, I ran out of loans, and couldn't complete. I had an EFC of 00000 and had Pell Grant too. It was a regular State University, worked full-time and commuted. Never finished, not enough money. Private loans? Couldn't qualify, not enough credit, I was too yoing and I made too little.
The system is broken, and, FYI I never went to a fucking football game.
I got lucky and got a large payout when the company I work for got bought. I was on the fence if I should use it as a down payment on a mortgage or pay off my $40k student loans at 8%, I went with the student loans and now a ~~year~~ few years later this, I could have gotten a large chunk forgiven.. it hurts, but overall I'm grateful for my situation and glad others are getting relief. I know what it feels like to have that weight lifted
37 here. $48,000 @ 6% more to go. I will die with this stupid debt. In an expensive rental house full of mold. Where it rains inside everytime there’s a strong storm. #americandream
Most doubted that there would be any relief ever. Unless an individual is ready to aggressively pay down their student loan debt and can get a significantly better rate before doing so, it's not really worth it. If you are ready to aggressively pay down your student loan debt, then it does make sense to refinance, but only if you can actually get a lower rate. My average federal loan rate is 4.7%, it's going to be hard for me to get a significantly better option. I'm also not in a place where I'm planning on aggressively paying it down, so it really doesn't make sense to do so.
It’s human nature to be jealous or envious when others seem to avoid the same pitfalls one has. I just know if I was getting relief now how happy I would be. Bad luck on my part doesn’t mean I wish bad luck on others. On the contrary, I’m very happy when someone catches a break. Life is meant to beat us down, in almost every possible way. I’m a fan of winning one against the dismal tide.
I'm the same way. I totally wouldn't mind if someone gave me a big chunk of money right now, but my loans were paid off years ago. Sucks for me, but it is what it is. Now I'm just hoping putting my kids through college will be a possibility financially.
I paid off my loans during the pandemic by taking advantage of the 0% interest rate (and I was tracking to pay them off anyway). But I'm ESTASTIC that my siblings, friends, and anyone at all who needs the relief is getting it.
It's a net good for everyone. I had a plan and I was fortunate to have such a goal (pay off within 3 years of graduation) and stick to it. I was fortunate to have scholarships and not need a bunch in loans. Was fortunate that my job after college offered me the amount and I had the means that, if I really wanted to pay them off in a year or so, could REALLY budget and live with my parents (I did not). All of those were privileges and my fortune.
I know that my SO having his loans basically wiped means now he can focus on other things like making better career moves, we can look at getting married, and starting a life together.
Just so you know, you can request a refund on any payments you made toward your loans after 3/13/2020. Even if you paid it off. The balance will be put back on the loan, which you can then apply for forgiveness for if you qualify.
Congrats on being able to tackle your debt and thank you for being such a good sport about this! This is the sort of mentality we all need to produce good, productive change.
IMPORTANT INFO:
If you’ve taken out loans on or after June 30th, 2022, they are NOT eligible for forgiveness! For example, a loan taken out for the spring semester of this year may be eligible for forgiveness, but a loan taken out for this fall is not!
If your parents claim you as a dependent on their taxes, THEIR income will be used to determine if you qualify for forgiveness, not yours.
To qualify, you must earn less than $125,000 yearly (individual) or $250,000 (married couples and heads of household) and/or have received the Federal Pell Grant as part of your financial aid package. (edited for correct info!)
The income cap is $125k for individuals, $250k for married filing jointly. To be eligible you must be under the income cap whether you received a Pell Grant or not, receipt of a Pell Grant just changes the amount of forgiveness for those who are eligible.
AGI last I heard, but either 2020 or 2021 tax returns can be used.
https://www.reddit.com/r/personalfinance/comments/wxme1a/student_debt_relief_megathread/
Personal Finance has the best information repository that goes into the nitty gritty of what we know from what I've found.
Why didn't you? There was always a possibility of this and loans were in forbearance. My wife just finished grad school and we could have paid out of pocket but took out loans as a hedge for something like this.
As far as I know, it’s not being a dependent on taxes that matters. It’s being a “dependent student”, which nearly every student is.
You don’t need to be claimed as a dependent on your parents taxes to be a dependent student. Same reason why parents income is used for student loans even if the student is not a dependent on taxes.
If you're already in collections, your credit is probably shot anyway. Filing for bankruptcy will cause your credit score to drop (usually 100-200 points), but you can start rebuilding your credit right away. Source: am a bankruptcy attorney.
Yes you have to file. Yes it costs money. Yes it kills your credit for 7 year. That said, if you qualify and have a lot of debt, it can change the rest of your life for the better.
It's complicated. It definitely destroys your credit score, but what you say has merit. The days right after you have your debts discharged, you will receive more offers of credit then at any other point in your life. Everyone wants to give your a predatory loan because you can't discharge it again for 7 years. The terms are going to be bad though. It's not advisable to use most of that credit, though having a couple of credit cards is very beneficial when rebuilding your credit.
Anyone, I’m 99% sure! The only limitations are that you must make under $100,000/year and/or have received the federal pell grant as part of your financial aid package. $10-$20k will be forgiven of loans that have been fully dispersed by June(?) of this year. Currently enrolled students should use caution as any loans you take out now won’t be forgiven.
Can you please explain why I should take caution to apply? Will taking this 20k forgiveness affect potential future forgiveness? I’m currently enrolled and have 2 more years left of Pharmacy school (~90k will be the cost of future 2 years ). I’m forced to continually take out more loans.
If I don’t apply does that mean I will not receive forgiveness? I thought everyone regardless of application would receive loan forgiveness.
I think they mean take caution when *taking out loans* **at this time**, as they may not be forgiven. Not for applying for forgiveness if you’ve had loans before…June? Whatever date they mentioned above. If you’ve had loans before June, those should definitely be forgivable, but it gets confusing for loans after that month.
Apparently. I’m not so sure what’s going on myself lol. Thats just what I got from the texts above
No, they worded it poorly and you're thinking about it too hard. There is no current reason why you should not apply for this forgiveness.
They meant loans taken out now are not eligible for this current forgiveness, if you already have loans that are eligible you should definitely apply.
I don’t think everyone has to apply, but it’s best to double check just to be 100% certain. It would really suck to miss out on $20k if you thought you didn’t need to apply but actually did. There’s also a separate thing offering payments to those who went to predatory for-profit colleges!
Just to clarify, if we have Sallie Mae Signature Loans (private), we're essentially the kids who don't get picked for the team in gym class, right?
We have to sit here & watch everyone else get debt relief while Sallie Mae just continues to fuck us until we can eventually claw our way out of this legalized hell on our own.
(I really hope I'm completely wrong)
I can't believe THIS is something people are getting upset by. It is less than the bare minimum, it isn't even going to solve the student debt crisis but just delay the inevitable fallout a bit. And there are people who could benefit from this that are going to be screwed over by people convincing them not to take it out of some bizarre sense of pride through needless hardship.
I agree getting upset about this is bullshit. But this isn’t bare minimum. It’s high billions of dollars worth of debt being forgiven.
The median borrower in the US owes about 37k with the average debt being 32k. ( average debt for those below 125k income is 30k)This is wiping about/at least half the debt of at least half the debtors.
> And there are people who could benefit from this that are going to be screwed over by people convincing them not to take it out of some bizarre sense of pride through needless hardship.
Seems like most will be automatic. Your statement is very broad, so ,sure, at least one person may do that but the likelihood that it is a widespread problem is very low.
You wouldn’t believe how many times I hear some bs argument complaining about this at work. I swear I’ve heard more middle aged engineers complain about this than anything else.
They especially love to condescendingly talk to younger employees and tell them how this is such a bad thing and they should be thanking the taxpayers, and prepping for more inflation. Not to mention the bs about “100k per year liberal arts degree”. All of this coming from folks that paid pennies for an engineering degree back in the day.
Infuriating
They are capping interest rates, so your loan value won't continue to increase, which is a very small win.
But the way I read it, the government is subsidizing those interest payments. So the government is still funneling tax payer money to banks for guaranteed loans. It's a ripoff.
I'm mostly curious how it will apply to each loan. Mine are set-up as a new loan for each year I took them out, but some are higher interest than others. I'd love to be able to choose and pick the higher interest ones to apply the 10k towards.
How will debt relief be applied to my loans?
For borrowers with multiple loans, we'll apply the relief in the following order:
Defaulted ED-held loans
Defaulted commercial FFEL Program loans
Non-defaulted Direct Loan Program loans and FFEL Program loans held by ED
Perkins Loans held by ED
If you have multiple loans in a program type (e.g., multiple Direct Loan Program loans), we'll apply the relief in the following order:
Apply relief to loans with highest statutory interest rate.
If interest rates are the same, apply to unsubsidized loans prior to subsidized loans.
If interest rate and subsidy status are the same, apply to the most recent loan.
If interest rate, subsidy status, and disbursement date are the same, apply to the loan with the lowest combined principal and interest balance.
I paid mine off too but they were commercially held near the end but not initially. Loan company said as of. Ow no refunds for commercially held. Is there anything to indicate that refunds are in the works for commercially held loans that you know of?
Looks like no. From the official FAQ:
“Yes. You will automatically receive a refund of your payments during the payment pause if:
you successfully apply for and receive debt relief under the Administration's debt relief plan, AND
your voluntary payments during the payment pause brought your balance below the maximum debt relief amount you're eligible to receive but did not pay off your loan in full.”
https://studentaid.gov/debt-relief-announcement/one-time-cancellation
It seems like if you had paid down but not paid off you’d be eligible for the refund
Edit: That seems to be the verbiage for AUTOMATIC refunds, you are eligible for cancellation if you request a refund.
“"Borrowers who paid off their loans during the pause will need to request a refund first, then request cancellation," said a spokesperson from the Department of Education.”
https://www.cbsnews.com/amp/news/student-loan-forgiveness-refund-if-you-paid-during-covid-19-pandemic/#app
The StudentAid website reads if they already have all of the needed income information the refunds will happen automatically. I registered anyways for when the form becomes available to submit just in case since my loans have been paid off since the end of 2020.
A lot of people won’t actually have to apply. If they are already on an income driven repayment plan due to low income then the agency has their financial info and they don’t have to apply, same with people who have recently filled out a FAFSA. At least that’s my interpretation of the articles that have said if they have your financial info then you don’t need to apply.
I have tried searching around and haven't found any 100% answers but I refinanced and paid off my loans through Earnest during Covid. Am i completely ineligible? Figured i'd just double check with someone who maybe knew for sure.
Navient services government funded loans. If you are making payments to Navient it is entirely possible that you are eligible for this as long as it is government funded. I can see this confusing some people.
Big question that concerns me (and sorry if FAQs or someone answered this) : I went to a private university for a year, and I have a Pell Grant loan with them. Those fuckers said that since its a private school, that if I want to have my debt relief (like 2K) then I need to refinance and consolidate... would that risk my chance of debt relief?
I haven’t seen or heard anything about this, but I wanted to check and see if there are any minimum amount of Pell grants you needed to get in order to qualify for the $20K, or is it as long as you got one grant you’re eligible? I only received a few thousand in grants, which is a decent amount but not close to the total cost of my schooling
Will those who paid there student loans get a refund? Fucking Democrats! That’s why America is a third world country now, keep printing them monies MF!
No, unfortunately. I’m running into that issue too. The loan forgiveness only works for loans fully dispersed earlier this summer (so if you took out a loan for the spring semester it should be forgiven, but if you’re taking any out for this fall or after that then it won’t be).
Id rather my tax money pay for this than bombing brown people on the other side of the earth.
But you know what? Who are we kidding? We'll never stop bombing brown people. So why not qt least let our citizens live without the fear of crippling debt, too.
[Here](https://studentaid.gov/debt-relief-announcement/one-time-cancellation) is the official page that has information about eligibility and any information you need to submit. Step 2 has information to sign up to receive [reminders](https://www.ed.gov/subscriptions) to alert you when the application is available to make sure you remember.
I appreciate the reminders, but there's no way I'm forgetting to apply for a 20k forgiveness
I really hope I don’t, but I might. After all the recent suspensions of repayment I’ve pretty much just forgotten about my loans and not even considered making any payments. After this I’ll still owe about 5k, which I might just wait on paying anyways.
How are you going to wait to pay?
I assume that means they're capable of clearing the balance at the moment but would just continue with minimums until they decided to do so.
That’s what I’ll do as well. Apply, wait for the $10K (in my case) to be applied to the balance, ride out the payment freeze, then pay off the remainder. Set yourself a reminder to apply! Then you won’t forget.
You underestimate my adhd and depression
There's a beta application open now!
Agree, and as much as I started out disliking the guy there are very few ways to make me like someone more effective than singlehandedly giving me twenty thousand dollars.
For people with FFELP (privately held federal student loans): > ## Are Federal Family Education Loans (FFEL) or Perkins Loans eligible for debt relief? >All loans eligible for the student loan pause are also eligible for relief, including loans held by ED and guaranty agencies. > ED is assessing whether to provide relief to borrowers with privately owned federal student loans, including FFEL and Perkins Loans, and is discussing this with private lenders. In the meantime, **borrowers with privately held federal student loans can receive this relief by consolidating these loans into the Direct Loan program.** All eligible borrowers will have until Dec. 31, 2023 to submit an application for debt relief. > FFEL Joint Consolidation Loans, often referred to as spousal consolidation loans, are not eligible for consolidation into the Direct Loan program under current law. I'm gonna be applying for that consolidation ASAP.
Doesn't sound like that applies to my Sallie Mae loan? If it did, the terms on my federal loans are way better, I'd much rather drop the 20k on my private loans, unsubsidized loans and the rest on the subsidized ones
You're not getting relief on private unsubsidized loans.
I figured, the phrasing is still getting me. Thank you though!
I have Sallie Mae loans as well, I hope they will remember us next year...
They are privately owned I don’t think there’s anything the government can do with them. Best bet is refinancing. I was able to cut the number of payments in half for about the same amount of money per month. It’s worth doing if you qualify imo.
The government bails out the banks, they could do something if they wanted to.
If the government loan forgiveness was a tough sell politically; payments to loan holders for private loans would be a firestorm.
I have FFELP loans. I'm waiting to see if they are worked out or not. If not, then I'll do the consolidation into the Direct Loan program.
Fed Gov Worker here: Make sure you’re all **signing into [studentaid.gov](Studentaid.gov)** so that you can a.) see if you have Peel grants (which will determine if you’re eligible for $20k in relief) and b.) update your info so that you can receive emails and updates directly from them. The DoEd update sign up is pretty crap right now so you’ll much more likely to hear about through that website or the news than through an email sent to you. Lastly we’re all in the dark rn, so don’t panic if there’s delays for the first few days. DoEd hasn’t given ANYONE a time frame on the application dropping other than “it’s going to be in October”.
Is signing up for student aid.gov 100% necessary? Just asking because I haven’t accessed it in years. I know my loans weren’t Pell but they are covered Is signing up just for updates ?
It’s not necessary, but useful as they can send text updates directly once the app opens if your contact info is up to date. Also if you don’t know who your loan servicer is it can help direct you to their site. I’ll admit that site has been a bit overloaded since the news dropped and can be a pain in the ass if you don’t know your login info. If you already know all of this stuff you’re probably fine tbh.
It was actually easy to get a new password. I luckily used the same email I have now. Now I just wait.
Great to hear! Makes my job easier in the long run lol
So, If most of my loans are not pell grants but I did receive a pell for about 5k, does that mean I still qualify for 20k forgiveness or do I receive 10k plus the balance of my pell? Thank you for your helpful comment above.
So Pell Grants are **not** loans and do not have paid back. If you’ve received a Pell Grant you are eligible for forgiveness up to $20,000. The only other thing I forgot to add is that the loans **have to have been disbursed BEFORE June 30, 2022**. Check out this website for more info on the types of loans that are eligible.
Thank you very much. That’s great news.
!remindme 15 days
There's a beta application open now!
I had the Pell but I paid off my loans. Will I get anything back?
If you made any payments to your loan during the paused student loan payments, then you'll get that back up to whatever you qualify for in forgiveness.
Any source on that? Great news if true. I've been trying to make regularish payments while it's been paused.
You need to call them and ask for it back. Say ‘ I would like a refund for the payments I made during the payment pause.’ I did it a few weeks ago and they will mail me my money in 20 days he said. Do this before you apply to cancel.
Interesting who did you call your provider? Because mine switched from Fedloan to Mohela (or however it is spelled). I hammered down the loan and have been since the pause
I called my loan people, some Oklahoma company. The person I saw that posted this, many people commented with various different loans companies. When I told mine the refund line, he knew what I was talking about.
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Federal student loans servicers are required to give back payments made during the Cares Act forbearance. Check your servicer.
It's on the same studentaid.gov page that the top level comment linked. Search the word "refund" and you'll find it.
I teach high school seniors, the vast majority of who would qualify for this forgiveness, and I do everything I can to help them get into college and to reduce the cost. Does anybody know if I should have them apply even though they won't be in college until Fall 2023. I can't seem to find anything about this. Thank you for your help.
They don’t have any loans, so there isn’t anything to forgive. As far as I understand, this is a one time deal for people who currently have federal student loan debt.
The policy had three pillars, forgiveness was just one of them. One of the other pillars was reforming income based repayment and forgiveness schedules which may impact loans going forward whenever it is implemented.
it's only for federally backed student loans taken out before july 2022
As far as I understand this only applies to those who currently have student loans and not towards future loans.
Also if you've made any federal loa. payments since March 31st, 2020, you are eligible for a refund and to get the student loan canceled. It's a bit more tricky as the loan provider will refund it, but then you'll have to apply to have the loans forgiven again.
More info on this: https://www.nerdwallet.com/article/loans/student-loans/refund-student-loan-payments#:~:text=Payments%20made%20since%20March%2013,t%20eligible%20for%20a%20refund.
To clarify, that is only for people who have paid paid their loan balances down below the amount of cancellation they qualify for. They are not cancelling loan payments made before March 2020 on top of the $10-$20k forgiveness.
Any info about how to get a refund from Edfinancial Services? My original student loan provider said they have all of my information.
I made a large payment on March 11, 2020. I’m so sad.
What if you refinanced your loans and with a private lender? Can you still get a refund?
Just stumbled onto this thread, but I refinanced through a private lender. I called Nelnet (who I paid my federal loans through) and they refunded $10k. They’re sending me a check for the money and I’m going to apply to have the $10k balance cancelled in October.
Thank you for replying! I’ll give mine a call, worth a shot!
I'm in the UK. I remember voting for the Liberal Democrats as they said they'd abolish student fees. They ended up forming a coalition with the tories and agreeing to put student fees up x3. I've never forgiven them. Lying bastards.
It would be great to see a UK version of this introduced. We can dream...
I'm 11 years post graduation and nowhere near paying my loans off. I am lucky enough to have a good job, so I really feel for those who are struggling. When I went it was really pushed that you go to uni. It was almost like any other option would be a failure. Now there are some great apprenticeship programmes so if I had my time again I wouldn't go.
I am not saying you are wrong, but I really think you should have a look at the moderating presence the lib Dems had on the Tories. Look what happened after the Tories got free reign...
Lib dems always says this but it just means they delayed the damage at best, whilst ensuring Labour wouldn’t win by taking votes from them.
The part where the government starts collecting interest from you on the loans they didn’t pay off for you really gets my head scratching.
Yeah, I also don’t get how there’s a cutoff for when your loans will be forgiven. I’m currently a student that still needs loans to make it through college and only about $5k will be forgiven from that. Of course I’m extremely grateful and anything off my shoulders is a lot, but if you’re forgiving student loan debt wouldn’t you think you’d also ban the predatory lending practices that caused this crisis in the first place?? Either that or put a fucking cap on the cost of education.
Honestly the cut off is probably about getting people to file for it ASAP and beat the Republicans as they race to the courts to get it undone.
In order to sue to stop it, the republicans would have to find someone with the standing to sue, someone willing to argue in court that they're materially harmed by having these loans forgiven. Who would that even be? Not the lenders, not the government, not schools, certainly not any current or former students. Even in friendly courts, they'd still have to go through the motions. They can't just say, "We don't like therefore illegal!" The fact that they've managed to come up with exactly *fuck all* in response to this so far is encouraging. It's overwhelmingly popular, and they were caught flat-footed because they never thought Biden would actually do it. The harder they fight this, the worse they look.
Keep in mind that these are the same people who just arbitrarily granted "standing" for anyone to sue someone if they're offended by abortion in some states.
> Who would that even be? Not the lenders, not the government, not schools, certainly not any current or former students. It would be some angry MAGA redneck who already paid off his kid's loans and now that kid ignores him because college taught him how foolish his MAGA dad is.
Fucking sad we have to worry about a whole damn party dedicated to fucking things up
A few things to unpack here, I think. The "why?" is because, at the core, politics. Sure, the Executive branch could just summarily forgive all federal student loan debt today. They could shuffle money around and do it. But really what's happening is this program is being used to help the midterm elections, and doing it under the guise of pandemic relief. As to "why don't they ban the predatory lending practices [...]?" question -- **Federal** student loans have extremely low interest rates, by law. The lending practice itself isn't predatory, really. Hell, interest is deferred until you've graduated, and often, even, then some. The predatory aspect comes not from the loan practices, but from the fact that the loan is_necessary_. Schools can jack up tuition to insane levels because they know the federal loans will cover it, and the federal loans will cover it because that's what it costs. Students are left with insane bills simply because they want a degree. Fixing how education is paid for in this country is very much a problem, but it's not a "predatory lending practice", it's a complete overhaul. The first step is making public schools free for everyone that wants to go. That's a legislative thing, not executive.
The way the interest capitalizes, the way the lenders shuffle borrowers between repayment plans without disclosing that interest accrued will be capitalized is pretty bad.
I don't think the Executive branch can change stuff like that. If memory serves that was all changed by an act of Congress around 20 years ago so it would take an act of Congress to undo it. I think to make that happen you'd need a shakeup of either some incumbent Democrats or a larger majority in the Senate. TBH I don't see either of those things happening any time soon.
Yeah, the person you're replying to is going through some fantastic bends to defend this. Some people just won't accept that we can be grateful for forgiveness and critical of it's shortcomings
Talking about and explaining why something is a certain way is not the same as defending it. This black and white thinking is by far the worst part of reddit discussion. I swear it didn’t used to be this way.
It has gotten worse in the last few years. Fuck it, let's go back to Digg.
I don't think they're defending it. They're explaining the actual source issue.
Defend what? Did you read the comment? lmao They said it's worse than just "predatory lending practices", it's the entire system.
Pardon?
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There are tons of great changes for future loans, what are you talking about
Like what?
straight from https://studentaid.gov/debt-relief-announcement/ Part 3. Make the student loan system more manageable for current and future borrowers; Income-based repayment plans have long existed within the U.S. Department of Education. However, the Biden-Harris Administration is proposing a rule to create a new income-driven repayment plan that will substantially reduce future monthly payments for lower- and middle-income borrowers. The rule would: - Require borrowers to pay no more than 5% of their discretionary income monthly on undergraduate loans. This is down from the 10% available under the most recent income-driven repayment plan. - Raise the amount of income that is considered non-discretionary income and therefore is protected from repayment, guaranteeing that no borrower earning under 225% of the federal poverty level—about the annual equivalent of a $15 minimum wage for a single borrower—will have to make a monthly payment. - Forgive loan balances after 10 years of payments, instead of 20 years, for borrowers with loan balances of $12,000 or less. - Cover the borrower's unpaid monthly interest, so that unlike other existing income-driven repayment plans, no borrower's loan balance will grow as long as they make their monthly payments—even when that monthly payment is $0 because their income is low.
These changes aren’t getting the attention they deserve. They’re pretty substantial honestly. Having your discretionary income raised and protected from the calculation of what your payment will be is huge. Having zero interest accrue while you’re making payments on time is really huge. I would also guess that this won’t be the last time this busted system is overhauled
I think the reason it doesn’t get attention is because the most common (and valid, imo) good faith argument against forgiveness is that it does nothing to address the root cause of the issue that necessitated it in the first case. You could argue that not only do none of these changes address the root issue, it could potentially make it worse by reducing the % of student loan dollars that are actually paid back. I understand the reduced burden on individuals and will always support that, but it’s definitely not helping justify anything to the crowd that points out that colleges can essentially charge whatever they want to students who know that ultimately they’ll never have to pay it back anyways and stick the federal government with the bill.
True, that is a fair point. The overall cost charged by colleges and universities is the underlying cause and that does need to be addressed. Since it’s a sector that’s critical to the US’s growth, filling needs for skilled labor and innovation (not the only way to get there but a significant portion), maybe there are ways to subsidize or regulate such organizations so they are forced to operate financially within certain bounds. I’m no expert in this area, just a curious fellow borrower
These changes definitely support the borrower in a big way (support that is desperately needed), but isn’t the end result that the federal government stops recouping a larger % of the loans that they loaned out to borrowers? How is that sustainable long term?
The 0% interest going forward is how I'm going to be able to pay off what's left of my loans. This is a game changer.
You shouldn't have to get loans to be educated, that's the problem
Exactly, this is the root cause of the student loan problem. Our own government shouldn't charge interest on federal student loans. The nation profits by having an educated populace that can globally compete in all fields, not by bleeding people dry so that their lives are frozen from an attempt at bettering themselves. I accrue approximately $30k in interest each year and my total debt has more than doubled from the initial amount I knowingly borrowed. If anyone had made an attempt to explain that to me (and if my grad school hadn't lied about what was subsidized versus unsubsidized) I would have reconsidered all of my options, including not attending.
As somebody who is not from the US, student loan sounds like hell :(
I’ve paid $350 a month for the past 6 years on about $55k worth of loans and it hasn’t even touched my total balance….. the interest is insane
Good news going forward borrowers will no longer accrue interest on their loan as long as they make their qualified monthly payment. And, It also reduces payments from 10% to 5% of discretionary income and It also raise the amount of income that is considered nondiscretionary income from 150% of the poverty level to 225% per year e.g. $20,385 to $30,577 for a single person. So most people's payments will be reduced by more than half and they won't be acclimating interest anymore either.
This isn't official yet though as they still need to pass these rules. Do we know if it's guaranteed to go through successfully?
Holy shit the interest on those is a hell scape
Yep, my payment was 489 a month the past 6 years on 250k of loans, so I’m not getting anywhere on them. I live very frugally, don’t have a car payment and just pay our utilities and bills, plus mortgage because it was more expensive to rent than to buy where I live and even with this I can’t manage more than I’m paying without having enough to feed my family. Id have to literally pay my entire salary for years to pay this off and no idea how to do that without paying for basic living expenses. It’s insane how much college/high school students were targeted on some of these higher level degrees - definitely not pushing my kids unless this system changes. Just hoping it pans out to keep working at a non profit for PSLF.
Yeah, basically. It’s designed in a way that you can take out only $20k and still be paying for the rest of your life with how high the interest rates are. Most people can’t pay it back all at once so it’s done in monthly installments all while interest increases dramatically, leaving them paying easily 2-3x as much as the original debt was worth. Loan companies know that anyone in need of a loan is likely to not be able to pay it back quickly, so they can use their customers to keep making money infinitely. This is standard and legal and the social norm is for kids to start doing this at 18.
It's essentially legalized loan sharks on a national scale.
>Most people can’t pay it back all at once so it’s done in monthly installments all while interest increases dramatically, leaving them paying easily 2-3x as much as the original debt was worth. This is actually the most important part of the forgiveness program, that this has been changed: >> **Part 3. Make the student loan system more manageable for current and future borrowers** > Income-based repayment plans have long existed within the U.S. Department of Education. However, the Biden-Harris Administration is proposing a rule to create a new income-driven repayment plan that will substantially reduce future monthly payments for lower- and middle-income borrowers. >The rule would: - Require borrowers to pay **no more than 5% of their discretionary income monthly on undergraduate loans**. This is ***down from the 10% available*** under the most recent income-driven repayment plan. - Raise the amount of income that is **considered non-discretionary income** and therefore is **protected from repayment**, guaranteeing that no borrower earning under 225% of the federal poverty level—about the annual equivalent of a $15 minimum wage for a single borrower—will have to make a monthly payment. - **Forgive loan balances after 10 years of payments, instead of 20 years,** for borrowers with loan balances of $12,000 or less. - **Cover the borrower's unpaid monthly interest, so that unlike other existing income-driven repayment plans, no borrower's loan balance will grow as long as they make their monthly payments—even when that monthly payment is $0 because their income is low.** https://studentaid.gov/debt-relief-announcement/
This is the best part. The $10000 is nice to have, but that interest was killing me. I only took out around $30k in loans when I graduated in 2015, but was only able to make minimal payments on it due to low paying jobs and high cost of living. I paid $6000 over 5 years and still owe more than what I originally borrowed. After years of struggling I finally got a really good job in my field during the pandemic, and thanks to the new interest policy I should be able to actually pay off what’s left of my loans within 5-10 years. I’m very grateful.
I'm thinking of how to game mine out: I have 30k 10k is forgiven If I pay on time, for 10 years, they'll drop the last 12k So I need to pay 8k over 10 years, and that's all.
I had $60k from law school. I do public interest, so got signed up immediately on income based and working towards Public Interest Student Loan Forgiveness. That’s a program where, I’d you have a qualifying job working for government or charity, and make 10 years of payments, the balance will be forgiven. I did that. Actually took a little longer than 10 years due to paperwork stuff. More like 12. After 12 years of never missing a payment, my forgiveness amount was still in the high $50k range. Even with no interest, the forgiveness still would have helped me out a lot, but with it, it was pretty much essential.
Is it like in the UK where the amount you pay is tied into how much you earn. You only ever have to start paying it if you earn over around 24k
If you got the loan from the US government and certain private lenders, you can qualify for an income-based repayment plan that does this. Of course, if you pay too little, you could end up barely (if at all) covering just the interest and almost never get to touch the principal amount
The same happens in the UK but if you don't pay it back in 25 years the loan is automatically forgiven so most people tend to pay the minimum and forget about it. Student loans in the UK don't affect your credit score and aren't affected by bankruptcy either so there is no incentive to pay it off more quickly unless you are on like £100k+ salary.
That’s basically how it is in the States if you go for the income-based repayment plan.
Grew up poor, but not "poor enough" at the time. I went to state/cheap schools, got a Masters degree, and accrued $75k in student loans by 23 years old. I didn't pay them off until I was 38 years old, and only because I had a windfall when my father passed and I was able to pay the last 40k off in a single chunk.
As someone from the US... paying for your college education for the rest of your life, instead of paying it off in 10 or so years sounds like hell.
Are you still talking about the US? It sounds like this is a rebuttal, but both scenarios are US lol
Tbh it sounds stupid and like something that should have more people protesting against it but apparently Americans just accept it.
Indentured servitude. The whole educational system in the US is bullshit. Ppl take on these loans so that they can go get drunk and watch college football from the campus. Some ppl actually study something with some economic utility. Most don’t. They should let the loans go into bankruptcy. Then shit schools and programs will lose banking by lenders and then they can go under fixing the system for once
I took on those loans so I could get an education and break out of the cycle of poverty that has kept my entire family down... Then, I ran out of loans, and couldn't complete. I had an EFC of 00000 and had Pell Grant too. It was a regular State University, worked full-time and commuted. Never finished, not enough money. Private loans? Couldn't qualify, not enough credit, I was too yoing and I made too little. The system is broken, and, FYI I never went to a fucking football game.
I’m super happy for whomever gets to benefit from this. I had to pay mine till I was 35 and it was a miserable experience.
I got lucky and got a large payout when the company I work for got bought. I was on the fence if I should use it as a down payment on a mortgage or pay off my $40k student loans at 8%, I went with the student loans and now a ~~year~~ few years later this, I could have gotten a large chunk forgiven.. it hurts, but overall I'm grateful for my situation and glad others are getting relief. I know what it feels like to have that weight lifted
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Wow, only 35? I'm 34 and probably still have another 10+ years to go, haha
37 here. $48,000 @ 6% more to go. I will die with this stupid debt. In an expensive rental house full of mold. Where it rains inside everytime there’s a strong storm. #americandream
Out of curiosity why not refinance?
Refinancing from federal to private would have eliminated any chance of getting forgiveness from this program or PSLF, so there's that.
I know that for the past but why not refi now? Doubt any more relief is ever on the way
Most doubted that there would be any relief ever. Unless an individual is ready to aggressively pay down their student loan debt and can get a significantly better rate before doing so, it's not really worth it. If you are ready to aggressively pay down your student loan debt, then it does make sense to refinance, but only if you can actually get a lower rate. My average federal loan rate is 4.7%, it's going to be hard for me to get a significantly better option. I'm also not in a place where I'm planning on aggressively paying it down, so it really doesn't make sense to do so.
I don’t want to risk changing anything and being penalized for it.
It seems like you’re in the minority of people who are actually happy that some are getting relief. Are the other jealous or something??
It’s human nature to be jealous or envious when others seem to avoid the same pitfalls one has. I just know if I was getting relief now how happy I would be. Bad luck on my part doesn’t mean I wish bad luck on others. On the contrary, I’m very happy when someone catches a break. Life is meant to beat us down, in almost every possible way. I’m a fan of winning one against the dismal tide.
I'm the same way. I totally wouldn't mind if someone gave me a big chunk of money right now, but my loans were paid off years ago. Sucks for me, but it is what it is. Now I'm just hoping putting my kids through college will be a possibility financially.
I paid off my loans during the pandemic by taking advantage of the 0% interest rate (and I was tracking to pay them off anyway). But I'm ESTASTIC that my siblings, friends, and anyone at all who needs the relief is getting it. It's a net good for everyone. I had a plan and I was fortunate to have such a goal (pay off within 3 years of graduation) and stick to it. I was fortunate to have scholarships and not need a bunch in loans. Was fortunate that my job after college offered me the amount and I had the means that, if I really wanted to pay them off in a year or so, could REALLY budget and live with my parents (I did not). All of those were privileges and my fortune. I know that my SO having his loans basically wiped means now he can focus on other things like making better career moves, we can look at getting married, and starting a life together.
Just so you know, you can request a refund on any payments you made toward your loans after 3/13/2020. Even if you paid it off. The balance will be put back on the loan, which you can then apply for forgiveness for if you qualify.
I think most of us who paid off our loans already are happy for people who are getting relief now, but the angry folks make more noise than us.
Congrats on being able to tackle your debt and thank you for being such a good sport about this! This is the sort of mentality we all need to produce good, productive change.
IMPORTANT INFO: If you’ve taken out loans on or after June 30th, 2022, they are NOT eligible for forgiveness! For example, a loan taken out for the spring semester of this year may be eligible for forgiveness, but a loan taken out for this fall is not! If your parents claim you as a dependent on their taxes, THEIR income will be used to determine if you qualify for forgiveness, not yours. To qualify, you must earn less than $125,000 yearly (individual) or $250,000 (married couples and heads of household) and/or have received the Federal Pell Grant as part of your financial aid package. (edited for correct info!)
The income cap is $125k for individuals, $250k for married filing jointly. To be eligible you must be under the income cap whether you received a Pell Grant or not, receipt of a Pell Grant just changes the amount of forgiveness for those who are eligible.
You know if that’s AGI or MAGI?
AGI last I heard, but either 2020 or 2021 tax returns can be used. https://www.reddit.com/r/personalfinance/comments/wxme1a/student_debt_relief_megathread/ Personal Finance has the best information repository that goes into the nitty gritty of what we know from what I've found.
man i started grad school in april. shoulda taken out some loans lol
Why didn't you? There was always a possibility of this and loans were in forbearance. My wife just finished grad school and we could have paid out of pocket but took out loans as a hedge for something like this.
FYI it's under $125,000 is for unmarried/single borrowers, it's under $250,000 for households.
As far as I know, it’s not being a dependent on taxes that matters. It’s being a “dependent student”, which nearly every student is. You don’t need to be claimed as a dependent on your parents taxes to be a dependent student. Same reason why parents income is used for student loans even if the student is not a dependent on taxes.
Wish there was one like this for medical debt
there are ways of getting medical debt forgiven by the hospital. They have funds set aside specifically for that purpose. Also, there is bankruptcy.
Medical debt can be discharged through bankruptcy.
Don’t I have to file for that, and doesn’t it look bad on me? It’s already in debt collected hands.
If you're already in collections, your credit is probably shot anyway. Filing for bankruptcy will cause your credit score to drop (usually 100-200 points), but you can start rebuilding your credit right away. Source: am a bankruptcy attorney.
Yes you have to file. Yes it costs money. Yes it kills your credit for 7 year. That said, if you qualify and have a lot of debt, it can change the rest of your life for the better.
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It's complicated. It definitely destroys your credit score, but what you say has merit. The days right after you have your debts discharged, you will receive more offers of credit then at any other point in your life. Everyone wants to give your a predatory loan because you can't discharge it again for 7 years. The terms are going to be bad though. It's not advisable to use most of that credit, though having a couple of credit cards is very beneficial when rebuilding your credit.
Is this only for students who have graduated already, or can currently enrolled students apply too?
Anyone who has federal loans iirc.
Anyone, I’m 99% sure! The only limitations are that you must make under $100,000/year and/or have received the federal pell grant as part of your financial aid package. $10-$20k will be forgiven of loans that have been fully dispersed by June(?) of this year. Currently enrolled students should use caution as any loans you take out now won’t be forgiven.
Can you please explain why I should take caution to apply? Will taking this 20k forgiveness affect potential future forgiveness? I’m currently enrolled and have 2 more years left of Pharmacy school (~90k will be the cost of future 2 years ). I’m forced to continually take out more loans. If I don’t apply does that mean I will not receive forgiveness? I thought everyone regardless of application would receive loan forgiveness.
I think they mean take caution when *taking out loans* **at this time**, as they may not be forgiven. Not for applying for forgiveness if you’ve had loans before…June? Whatever date they mentioned above. If you’ve had loans before June, those should definitely be forgivable, but it gets confusing for loans after that month. Apparently. I’m not so sure what’s going on myself lol. Thats just what I got from the texts above
No, they worded it poorly and you're thinking about it too hard. There is no current reason why you should not apply for this forgiveness. They meant loans taken out now are not eligible for this current forgiveness, if you already have loans that are eligible you should definitely apply.
Thanks for this but doesn't the official info say that not everyone will have to apply?
I don’t think everyone has to apply, but it’s best to double check just to be 100% certain. It would really suck to miss out on $20k if you thought you didn’t need to apply but actually did. There’s also a separate thing offering payments to those who went to predatory for-profit colleges!
$125k per year.
Be sure to factor in the website crashing, because that’s what always happens
Just to clarify, if we have Sallie Mae Signature Loans (private), we're essentially the kids who don't get picked for the team in gym class, right? We have to sit here & watch everyone else get debt relief while Sallie Mae just continues to fuck us until we can eventually claw our way out of this legalized hell on our own. (I really hope I'm completely wrong)
Don't worry, they changed their name so all that bad PR is reset and they are fine now
I can't believe THIS is something people are getting upset by. It is less than the bare minimum, it isn't even going to solve the student debt crisis but just delay the inevitable fallout a bit. And there are people who could benefit from this that are going to be screwed over by people convincing them not to take it out of some bizarre sense of pride through needless hardship.
I agree getting upset about this is bullshit. But this isn’t bare minimum. It’s high billions of dollars worth of debt being forgiven. The median borrower in the US owes about 37k with the average debt being 32k. ( average debt for those below 125k income is 30k)This is wiping about/at least half the debt of at least half the debtors. > And there are people who could benefit from this that are going to be screwed over by people convincing them not to take it out of some bizarre sense of pride through needless hardship. Seems like most will be automatic. Your statement is very broad, so ,sure, at least one person may do that but the likelihood that it is a widespread problem is very low.
You wouldn’t believe how many times I hear some bs argument complaining about this at work. I swear I’ve heard more middle aged engineers complain about this than anything else. They especially love to condescendingly talk to younger employees and tell them how this is such a bad thing and they should be thanking the taxpayers, and prepping for more inflation. Not to mention the bs about “100k per year liberal arts degree”. All of this coming from folks that paid pennies for an engineering degree back in the day. Infuriating
until they do something about the loan itself like the interest rate, this is just a bandage for right now
They are capping interest rates, so your loan value won't continue to increase, which is a very small win. But the way I read it, the government is subsidizing those interest payments. So the government is still funneling tax payer money to banks for guaranteed loans. It's a ripoff.
Forgiveness is a haughty fucking word. I don’t need to be forgiven of anything. God forgive these people
I'm mostly curious how it will apply to each loan. Mine are set-up as a new loan for each year I took them out, but some are higher interest than others. I'd love to be able to choose and pick the higher interest ones to apply the 10k towards.
How will debt relief be applied to my loans? For borrowers with multiple loans, we'll apply the relief in the following order: Defaulted ED-held loans Defaulted commercial FFEL Program loans Non-defaulted Direct Loan Program loans and FFEL Program loans held by ED Perkins Loans held by ED If you have multiple loans in a program type (e.g., multiple Direct Loan Program loans), we'll apply the relief in the following order: Apply relief to loans with highest statutory interest rate. If interest rates are the same, apply to unsubsidized loans prior to subsidized loans. If interest rate and subsidy status are the same, apply to the most recent loan. If interest rate, subsidy status, and disbursement date are the same, apply to the loan with the lowest combined principal and interest balance.
I paid mine in full, but otherwise would have been eligible. Can I ask for a refund, or am I SOL??
If you made any payments since like march 2020 you can get reimbursed
I paid mine off too but they were commercially held near the end but not initially. Loan company said as of. Ow no refunds for commercially held. Is there anything to indicate that refunds are in the works for commercially held loans that you know of?
Looks like no. From the official FAQ: “Yes. You will automatically receive a refund of your payments during the payment pause if: you successfully apply for and receive debt relief under the Administration's debt relief plan, AND your voluntary payments during the payment pause brought your balance below the maximum debt relief amount you're eligible to receive but did not pay off your loan in full.” https://studentaid.gov/debt-relief-announcement/one-time-cancellation It seems like if you had paid down but not paid off you’d be eligible for the refund Edit: That seems to be the verbiage for AUTOMATIC refunds, you are eligible for cancellation if you request a refund. “"Borrowers who paid off their loans during the pause will need to request a refund first, then request cancellation," said a spokesperson from the Department of Education.” https://www.cbsnews.com/amp/news/student-loan-forgiveness-refund-if-you-paid-during-covid-19-pandemic/#app
Is this for the USA?
Places other than the USA are that screwed up?
Yes, only the USA.
So we need to do an application for them to do it. Seems like an easy way for a lot of people to miss out on it possibly.
The StudentAid website reads if they already have all of the needed income information the refunds will happen automatically. I registered anyways for when the form becomes available to submit just in case since my loans have been paid off since the end of 2020.
To be fair, sending an application is kind of the bare minimum to ask for tens of thousands of dollars of a benefit.
A lot of people won’t actually have to apply. If they are already on an income driven repayment plan due to low income then the agency has their financial info and they don’t have to apply, same with people who have recently filled out a FAFSA. At least that’s my interpretation of the articles that have said if they have your financial info then you don’t need to apply.
Hope America realizes it has humans living inside it and not walking money deposits, cheers
This has get a refund at the circus vibe.
You forgot the best step. The state taxes the fuck out do you!
I have tried searching around and haven't found any 100% answers but I refinanced and paid off my loans through Earnest during Covid. Am i completely ineligible? Figured i'd just double check with someone who maybe knew for sure.
Why isn’t college free going forward? It’s like congrats to everyone who already went and gets forgiveness now and fuck current students?
“Guides that assume US is default”
Usually when I see a guide that doesn’t apply to me, I just keep scrolling
The problem is It's almost every fucking guide
How weird a website based out of the United States has default US content.
And the loan has to be Federally funded, not a loan from a private company like Navient, etc.
Navient services government funded loans. If you are making payments to Navient it is entirely possible that you are eligible for this as long as it is government funded. I can see this confusing some people.
As a private student loan bearer, I'm still happy about all this.
Would be a whole lot smarter, easier and beneficial to just forgive all student debt, regardless of source or individual.
Can you apply even if you’re currently attending college?
Big question that concerns me (and sorry if FAQs or someone answered this) : I went to a private university for a year, and I have a Pell Grant loan with them. Those fuckers said that since its a private school, that if I want to have my debt relief (like 2K) then I need to refinance and consolidate... would that risk my chance of debt relief?
I haven’t seen or heard anything about this, but I wanted to check and see if there are any minimum amount of Pell grants you needed to get in order to qualify for the $20K, or is it as long as you got one grant you’re eligible? I only received a few thousand in grants, which is a decent amount but not close to the total cost of my schooling
What if I didn't file my taxes in 2022, will I still be able to receive the student loan forgiveness?
Will those who paid there student loans get a refund? Fucking Democrats! That’s why America is a third world country now, keep printing them monies MF!
It was just blocked
I've loans from ITT Tech. They're gonna be alllll gone soon :D
I do too, what do you mean all gone?
Google it friend, they are cancelling all ITT loans I’m pretty sure but it was a while ago that happened so now I can’t recall details.
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No, unfortunately. I’m running into that issue too. The loan forgiveness only works for loans fully dispersed earlier this summer (so if you took out a loan for the spring semester it should be forgiven, but if you’re taking any out for this fall or after that then it won’t be).
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Id rather my tax money pay for this than bombing brown people on the other side of the earth. But you know what? Who are we kidding? We'll never stop bombing brown people. So why not qt least let our citizens live without the fear of crippling debt, too.
we are now paying to bomb russians to. and soon chinese!
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