![]() If a qualifying borrower also received a federal Pell grant while enrolled in college, the individual would have been eligible for up to $20,000 of debt forgiveness. Under Biden’s student loan forgiveness proposal, individual borrowers who made less than $125,000 in either 2020 or 2021 and married couples or heads of households who made less than $250,000 a year would have seen up to $10,000 of their federal student loan debt forgiven. Both the Senate and the House passed the measure, but Biden vetoed the bill in early June. Some Democrats joined Republicans in voting for a bill to block the program. But a group of Republican-led states and other conservative groups took the administration to court over the program, claiming that the executive branch does not have the power to so broadly cancel student debt in the proposed manner.Ĭritics also point out that the one-time student loan forgiveness program does nothing to address the cost of college for future students and could even lead to an increase in tuition. The forgiveness program, estimated to cost $400 billion, would have fulfilled a campaign promise of Biden’s to cancel some student loan debt. No debt had been canceled, even though the Biden administration had received about 26 million applications for relief last year and approved 16 million of them. What happened to the student loan forgiveness program “It is possible you may not reach your servicer via phone the first time you call, and you may need to call a few times before getting connected,” the group says. The National Association of Student Financial Aid Administrators warns that borrowers may need to have patience when contacting their student loan servicer, which might be overwhelmed with a high volume of inquiries at this time. ![]() They may be eligible for an income-driven repayment plan, which set payments based on income and family size, but require borrowers to submit some paperwork.įederal student loan borrowers can check the FSA website for updates on resuming payments.īorrowers will also have to reauthorize the automatic debit from their accounts to pay their monthly loan bill even if they authorized the withdrawals before the pause began. Millions of borrowers will have a different servicer handling their student loans since the last time they made a payment.īorrowers should also reach out to their servicer if they are worried they will not be able to afford their monthly payment. ![]() Student loan experts recommend that borrowers reach out to their student loan servicer with any questions about their loans as soon as possible.Īfter such a long pause, many borrowers may be confused about how much they owe, when to pay and how. “But the on-ramp to repayment will help borrowers avoid the harshest consequences of missed, partial, or late payments like negative credit reports and having loans referred to collection agencies,” he added.īorrowers will not be reported to credit bureaus, be considered in default or referred to collection agencies for late, missed or partial payments during the on-ramp period, according to a fact sheet from the White House. “Borrowers who can make payments should do so as payments will resume and interest will accrue,” Education Secretary Miguel Cardona said in a statement. Since then, the pause has been extended eight times – under both the Trump and Biden administrations.Ī law passed in early June that addresses the debt ceiling prohibits another extension of the pause.īut the Biden administration said Friday that it will provide a 12-month on-ramp period for borrowers reentering payment. Most student loan borrowers have not been required to make payments on their federal student loans since March 2020, when Congress passed a sweeping aid program to help people struggling financially because of the Covid-19 pandemic. Regardless of the way the Supreme Court ruled on the one-time forgiveness program, the Biden administration had said that student loan payments will be due starting in October. ![]() Altogether, the Biden administration has approved more than $66 billion in targeted loan relief to nearly 2.2 million borrowers. ![]()
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