Key Deadline Dates in President Biden’s Student Loan Forgiveness Plan

Posted by Matin Varshochi in Student LoansOctober 7, 2022(Last Updated October 17, 2022)3 min read
Key Takeaways
  • The beginning of the COVID-19 pandemic saw President Biden suspending student loan payments to allow people to use their money for more important expenses. 
  • Now, monthly payments are set to resume on January 1, 2023, but the Biden Administration is implementing a student loan forgiveness program that forgives up to $20,000.
  • As many people will be looking to take advantage of this program, it is recommended to apply before November 15, 2022, so there is adequate time for your application to be processed.
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BREAKING: Apply for Federal Student Loan Debt Relief through the Federal Student Aid website

 

At the beginning of the COVID-19 pandemic, President Joe Biden announced a pause on federal student loans. The main purpose of the pause was to temporarily relieve federal student loan borrowers of the burden of their debt amid the pandemic. However, now that the worst of the COVID-19 pandemic is over, federal student loan payments will resume for borrowers by December 31, 2022. Fortunately, the Biden administration released a plan to eliminate student loan debt for certain borrowers.


Details of President Biden’s Announcement

 

On August 24, 2022, the White House released a statement where the Biden Administration discussed its goals to lower the federal student loan debt. Right now, there are 43 million borrowers who have outstanding student loans, which is why the federal government is taking proactive steps to reduce the amount owed by those who choose to pursue post-secondary education. 


Requirements for the Loan Forgiveness Program

 

To help people have their student loans forgiven, the Biden Administration has implemented a student loan forgiveness program. To apply for student loan forgiveness, a couple of eligibility requirements must be met. 


Recommended Read: How to Make Your Student Loans Less Stressful


Income Level

 

Firstly to be eligible for the student loan forgiveness program, the person with outstanding student loans must have an individual income not exceeding $125,000 or a married income of $250,000. If the applicant fails to meet the income requirements, then they cannot receive any forgiveness on their current outstanding balance. 


Grants

 

To be forgiven up to $20,000 in debt, the second requirement that must be met is the usage of Pell grants. For you to be forgiven $20,000 in student loans, you must have received a Pell Grant. If you received a Pell Grant, then you are eligible to receive $20,000 off your outstanding balance. On the other hand, if you did not receive Pell Grants, that is ok, as you may be eligible for $10,000 off your student loans, pending your income level being within the disclosed thresholds. 

 

Recommended Read: Four (4) College Grants You Should Consider Applying For

 

The Importance of Applying Early

 

You may be wondering why it is important to apply now when the student loan payment pause ends on December 31, 2022. The reason why applying in early October is because of the lengthy application process. As mentioned earlier, 43 million borrowers currently have some form of student loan debt.

 

Person stressed at bill

Image Credit: fizkes / Shutterstock.com

 

Consequently, many people will be trying to take advantage of this forgiveness program, which means there will be a long time from when you apply and are accepted. It is said the application process will take around six weeks. Therefore, if you wish to apply in a way, it is recommended that you apply by November 15, 2022, at the latest.


If you currently have outstanding student loans and wish to apply for the student loan forgiveness program, click here to see what next steps have to be taken. 


The Money Wrap-Up

 

The average student debt is around $30,000, and this high amount means many recent college graduates will financially have a hard time paying these loans back. By applying for student loan forgiveness, you potentially have a chance of reducing your student loan debt, which will financially benefit you in the long run.

 

Main Image Credit: lev radin / Shutterstock.com

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