Do you qualify for Biden's Student Loan Forgiveness Plan?

At IOScholarships, we want to make sure that diverse and minority students have access to clear information about the qualifications for Biden’s Student Loan Forgiveness Plan.

Eligibility for Biden’s Student Loan Cancellation Plan

  • check-circle iconYou must earn less than $125,000 a year for individuals, or $250,000 for married couples and/or head of households. Individual borrowers who make under $125,000 annually are eligible for up to $10,000 in forgiveness. Current and former Pell Grant recipients are eligible to receive up to $20,000 in forgiveness if they meet the income requirements. The plan would cancel up to $20,000 in debt for current federal student loan borrowers and parent PLUS loan borrowers.
  • check-circle iconYou must have current outstanding debt on federal student loans, including parent PLUS loans, obtained before June 30, 2022.
  • check-circle iconCurrent students who are dependents must use their parents’ or legal guardians’ income to determine eligibility.
  • check-circle iconFederal loans taken out for undergraduate, graduate, and/or professional degrees qualify.
  • check-circle iconIf you never finished your degree or are still in school, you can still qualify as long as your loans were disbursed by June 30, 2022.
  • check-circle iconIf you defaulted on your federal student loans, you may still qualify for debt relief. If your loans are in default, you can likely still qualify for forgiveness. 
  • check-circle iconIf you continued to make payments on federal student loans during the payment pause starting in March 2020, or if you paid off those loans during the payment pause, those payments may be refunded.
  • check-circle iconIf you used federal student loans to pay for community college, a trade program, professional degree or other alternative certification, you’re still eligible for forgiveness.

 

  • x iconIf you secured federal loans after June 30, 2022, or if you already paid off your student loans before March 2020, you do not qualify.
  • x iconIf you have only private student loans, you do not qualify.
  • x iconMost Federal Family Education loans (FFEL) and Perkins loans that aren’t held by the federal government are ineligible for forgiveness. Borrowers with this kind of debt who applied for a direct consolidation loan before Sept. 29, 2022 should be eligible, but all other borrowers in this category currently cannot get forgiveness.

IOScholarships urges borrowers to go to  StudentAid.gov for the latest information.

5 tips to prepare and make payments more affordable when Federal student loan payments resume in 2023.

1. Update your address or contact info if needed

Make sure your contact information is up to date in your profile on your loan servicer’s website. Wrong contact information could make you miss important updates.

Here’s a checklist.

  • Email address
  • Physical mailing address
  • Phone number
  • Bank account information (It’s been a while; maybe you don’t use the account you have linked to your loans anymore.)
  1. Take a look at the minimum amount you’re required to pay

Your situation might have changed during the pandemic as you might have used the money you would have needed to spend on student loans to pay for something else. So it’s a good idea to get info about your payment and take a look at what your spending has been like over the last few months to figure out how much of a monthly student loan payment can fit into your budget. Be ready as your payment will be due no sooner than 21 days after servicer sends the billing statement.

  1. Take action now if you want to lower your monthly payments

If your situation has changed, and the required minimum payment is a bit too high one option to consider is enrolling in an income-driven repayment plan. With this payment plan, your required minimum payment is dependent on how much money you’ve earned that month and family size, and if your pay is low enough, they can reduce your monthly payments to as low as zero dollars.

You can apply for an income-driven plan through your servicer’s website in about 10 minutes and processing should take no more than two weeks.

But there are some cons to income-driven plans. One major downside to these plans is that payments may be small or even 0 which may feel great in the moment but you are accruing interest on that and multiplying your loan debt year over year. If you plan to take advantage of the income driven repayment plan don’t think it as your long-term repayment plan.

  1. Reach out to your loan servicer if you’re unable to make payments

Reach out to your servicer and have that conversation as soon as possible, so you know what your options are. If, for example, you’re currently unemployed, one option you may have is unemployment deferment. This lets you postpone your loan payments for up to another 36 months.

  1. Be proactive and take a look at your options now!

The time to act is now, before the year-end. To learn more about the end of forbearance go to www.Studentaid.gov.

 

5 consejos para los pagos de préstamos federales estudiantiles

Aquí hay 5 recomendaciones que puedes considerar para prepararte

1.      Actualiza tu información de contacto

Asegúrate de que tu información de contacto esté actualizada en tu perfil en el sitio web de tu administrador de préstamos. Una información de contacto incorrecta podría hacer que se pierdan actualizaciones importantes. Datos importantes para actualizar incluyen:

– Dirección de correo electrónico

– Dirección postal física

– Número de teléfono

– Información de la cuenta bancaria (Ha pasado un tiempo; tal vez ya no uses la misma cuenta que tienes vinculada a tus préstamos).

2.      Entérate de la cantidad mínima que debes pagar

Es posible que tu situación haya cambiado durante la pandemia, ya que puedes haber utilizado el dinero destinado a pagar la deuda de préstamo estudiantiles en otros gastos. Así que es una buena idea obtener información sobre tu pago y echar un vistazo a cómo han sido tus gastos en los últimos meses para averiguar qué cantidad de pago mensual del préstamo estudiantil puedes comenzar a pagar. Tu pago lo tendrás que pagar 21 días después de que el servidor envía el estado de cuenta que incluye la fecha de vencimiento del pago, el interés próximo y la cantidad de pago.

3.      Actúa ahora si quieres reducir sus pagos mensuales

Si tu situación ha cambiado, y el pago mínimo requerido es demasiado alto una opción a considerar es inscribirte en un plan de pago basado en los ingresos. Con este plan de pago, el pago mínimo requerido depende de la cantidad de dinero que hayas ganado ese mes, y si tu sueldo es lo suficientemente bajo, pueden reducir tus pagos mensuales hasta cero dólares.

Puedes solicitar un plan basado en los ingresos a través del sitio web de tu administrador de préstamos en unos 10 minutos y la tramitación no debería tardar más de dos semanas.

Sin embargo, los planes basados en los ingresos tienen algunas desventajas. Una de las principales desventajas de estos planes es que los pagos pueden ser pequeños o incluso puede ser que no tengas que pagar nada, lo que puede parecer maravilloso en el momento, pero se están acumulando intereses y multiplicando la deuda del préstamo año tras año. Si planeas aprovechar el plan de pago basado en los ingresos no lo pienses como tu plan de largo plazo.

4.      Llama a tu gestor de préstamos si no puedes hacer los pagos

Ponte en contacto con tu administrador de préstamos y tén esa conversación lo antes posible, para saber cuáles son tus opciones. Si, por ejemplo, actualmente estás desempleado, una opción que puedes tener es el posponer el pago por desempleo. Esto te permite posponer los pagos de tu préstamo hasta otros 36 meses”.

5.      No ignores tu próxima fecha de pago

Y este es el último consejo: sé emprendedor y analiza cuáles son tus opciones en este momento. El momento de actuar es ahora, antes de que acabe el año. Para obtener más información sobre los pagos de los préstamos estudiantiles federales, visita www.Studentaid.go

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Do you qualify for student loan forgiveness plan?