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President Joe Biden speaks about student loan debt forgiveness in the Roosevelt Room of the White House in Washington, Wednesday, Aug. 24, 2022. (AP Photo/Evan Vucci)
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President Biden’s student loan forgiveness application officially began on Oct. 17, and the federal cancellation plan allowed 31% of Illinois borrowers’ debt to be written off if they met income limits. rice field.
The plan provides federal student loan forgiveness of up to $10,000 for non-Pell grant borrowers and up to $20,000 for those who have received at least one Pell grant in their college career.
Borrowers are eligible if their 2020 or 2021 adjusted gross income is less than $125,000 for individuals or $250,000 for couples.
More than 70% of direct federal student loan borrowers write off at least 25% of their debt, as long as they meet federal income standards, according to Lynn Baker, spokesperson for the Illinois State Board of Student Services. I can.
About 31% of federal student loan borrowers in Illinois owe $10,000 or less, and about 42% of state federal borrowers owe between $10,000 and $40,000, according to U.S. Department of Education data. .
What types of student loans qualify for forgiveness?
Various federal student loans paid before June 30, 2022 are eligible for forgiveness, Baker said.
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Direct Loans (Unsubsidized and Subsidized)
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Direct Consolidation Loan (All underlying loans must be Department of Education owned loans and paid on or before June 30, 2022)
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FFELP loans held by the Department of Education or defaulted by a surety agency
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Perkins loan held by the Department of Education
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Parent and Graduate PLUS Loans
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Defaulted loans (including Department of Education owned or commercially serviced subsidized Staffords, non-subsidized Staffords, Parent PLUS, Alumni PLUS, and Department of Education owned Perkins loans)
Additionally, consolidation loans, including FFEL and Perkins loans not held by the Department of Education, are also eligible if the borrower applies for consolidation before September 29, 2022, Baker continued.
According to Baker, loans not eligible for relief include commercially held FFELP loans (not defaulted), private loans (including federal loans consolidated into private consolidated loans), and July 2022 Includes loans paid after the 1st. .
avoid forgiveness scams
The official student loan forgiveness application under President Biden’s plan is brief and asks for your social security number, but to avoid fraudulent programs, make sure you’re filling out the correct application. It is important.
The Federal Office of Student Aid offers the following tips for avoiding scams:
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be careful common scamThese include ‘Act Now’, ‘Registration is first come first serve’ and ‘Student Loan Flagged Forgiveness Awaiting Confirmation. Call Now!’
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not pay Help with loan relief. The FSA says “getting help from a private independent debt relief firm doesn’t necessarily mean you’re going to get scammed,” but his one-time waiver application from the federal government is free. can be completed.
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Make sure you are working with Partner of the U.S. Department of EducationThe FSA office provides an online list of official partners.
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