President Joe Biden announced up to $20,000 of forgiveness for federal Student Loan borrowers on Wednesday, Aug. 24, 2022, and extended the student loan payment pause to Dec. 31, 2022. If you have remaining federal student loan balances after forgiveness, you won’t need to resume making payments on the remaining amount for another four months.
Here’s what you need to know about student loan forgiveness and the extension of the pause on student loan payments:
- What this means for federal student loan borrowers
- When will student loan payments resume?
- What to do if you can’t make your student loan payments
What this means for federal student loan borrowers
Many borrowers will benefit from President Biden’s announcement, but not all. If your annual income is more than $125,000 for single people or $250,000 for married couples who file a joint tax return, you won’t qualify for the forgiveness.
But if your income is below the threshold, you could see your federal student loan balances reduced by as much as $20,000. If you took out federal student loans and also received Pell Grants, you’re eligible to have $20,000 of your federal debt forgiven. If you have federal student loans but didn’t receive Pell Grants, your forgiveness amount is $10,000.
President Biden also extended the payment pause for federal student loan borrowers until Dec. 31, 2022. In announcing the extension, the Department of Education said this extension would be the last one. The CARES Act first introduced the payment pause in March 2020. Borrowers weren’t required to make payments on their federal student loans, and their loans didn’t accrue interest. The payment pause has now been extended seven times. Nearly 37 million borrowers have had about $195 billion in loan payments waived between March 2020, when the deferral began, and April 2022, when the deferral was last extended, according to the Federal Reserve. Learn More: What to Know About the CARES Act and Student Loans If you’ll still have a federal student loan balance after forgiveness, you’ll have to begin making payments again after Dec. 31, 2022. At least 21 days before your first payment is due, you’ll receive a billing statement or other type of notice that will include your payment amount and due date. You can also contact your loan servicer at any time to get an estimate of your payment and due date. Before payments resume, the U.S. Department of Education recommends you: If you won’t be able to make your federal student loan payments, you have some options that could help: See Your Refinancing Options Keep Reading: The Complete List of Student Loan Forgiveness Programs The post Up to $20K in Student Loan Forgiveness for Some Borrowers, and Payments Remain Paused appeared first on Credible.Payment pause extended ‘a final time’
When will student loan payments resume?
What to do if you can’t make your student loan payments
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