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Students head to class at Rice University in Houston on August 29, 2022.
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Your application for student loan forgiveness will be prepared Until early Octobersaid the U.S. Department of Education.
After people applied, they were able to see relief within six weeks.
We want to avoid at least one major move while the borrower waits for the application launch and exemption to take place.
“If you expect forgiveness, don’t refinance your federal loans because private student loans aren’t eligible for forgiveness,” said Mark Kantrowitz, an expert in higher education.
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Federal student loan borrowers are eligible for up to $10,000 in student loan forgiveness if they don’t receive a Pell grant, a type of aid available to low-income undergraduates, the White House said. I’m here. they did Also, this relief is limited to people whose annual income is less than her $125,000, or to married couples or householders whose annual income is less than her $250,000.
Consumer advocates are wary of the benefits of refinancing student debt because of the extra protection that comes with federal loans, even if you owe more than you think you can afford. .
But there are some smart moves borrowers should take going forward, experts say.
They also don’t want to assume that student loan forgiveness won’t actually happen or be eligible for it, they add. Here are five steps you can take while waiting.
1. Make sure your contact information is up to date
While you’re waiting for your student loan forgiveness, you’ll need to update your contact information with the loan servicer and StudentAid.gov, Kantrowitz said.
This ensures that you never miss important information or deadlines.
2. Make sure your income is eligible
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Make sure you are eligible for relief. do this, Review your most recent tax returns and verify that your income is below the imposed income ceiling ($125,000 for individuals and $250,000 for households). The Department of Education considers a person’s so-called Adjusted Gross Income, or AGI, which may differ from your Gross Salary.
To find your AGI for 2020 and 2021, look for line 11, known as Form 1040, on the first page of your tax return.
3. Check loan details
The Department of Education said it is working to ensure that borrowers of commercially held FFEL loans also receive forgiveness, even if they do not hold the debt. But if you have these loans and want to make sure they’re included in your forgiveness sooner or later, we recommend integrating them into the major federal student loan programs.
Kantrowitz says you’ll also need to check if you’ve received a Pell Grant to determine if you’re eligible to receive the full $20,000 in cancellations.
4. Beware of scams
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While you wait, keep an eye out for one of the all-too-common Abby Shafroth, an attorney at the National Consumer Law Center, said about student loan fraud: No one should ask you for forgiveness, nor should you give out personal information to someone who calls you out of the blue, Shahros said.
5. If you have any questions, please contact the loan servicer
If you have any questions about suspending payments or terminating waivers with your servicer, contact them sooner or later.
In addition to Biden’s announcement about canceling student loans, he also We’ve extended the moratorium on federal student loan payments through December 31st. This will be his seventh extension of the pandemic-era bailout policy launched under the Trump administration, and likely the last.
“Loan servicers are likely to be bombarded with questions in the days leading up to the deadline,” Kantrowitz said.
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