(KATY, Texas) The Biden-Harris Administration has announced a Federal Student Loan Forgiveness program that would cancel up to $10,000 for a borrower’s federal student loans, plus up to another $10,000 for Pell Grant recipients. Eligibility would be limited to individuals with an income below $125,000 and households making less than $250,000, and the deadline to sign up would be December 31, 2023.
The announcement comes in response to staggering levels of student loan debt that have caused an ongoing multigenerational financial crisis. The crippling effects of the coronavirus pandemic on the U.S. economy also factor into the announced program. The student loan payment pause has been extended through the end of 2022, with payments set to resume in January 2023.
The announcement includes 50% reductions in caps to some repayment plans’ income-based monthly payments. Additionally, borrowers who kept paying off their student loans during the payment pause can request a refund of those payments and then request loan forgiveness. The proposed program may not involve monthly interest payment requirements for some borrowers. The administration designed these changes to ease the burden on Americans whose monthly student loan payments will again become due in January. The program has not yet opened, but borrowers can sign up for related notifications on the Department of Education subscription page.
The announcement comes through an executive order. The President presented it as follow-through on his campaign promises regarding student loans. There is much debate regarding the fairness of these changes and their expected economic effects. While the authority to cancel debt has not explicitly been given to Biden by Congress, the Biden-Harris Administration references the debilitating coronavirus pandemic for its authority to announce these program changes. It remains to be determined whether the loan forgiveness program will proceed according to its announced terms and schedule.
Ciment Law Firm, PLLC, The Debt Defender’s Owner, Consumer Debt Advocate, and Attorney Daniel Ciment commented on the announcement: “The federal student loan forgiveness program may be a welcome help to borrowers if it proceeds as proposed. While some debts may be completely canceled under the program, borrowers whose loans are not completely forgiven could be a few steps closer to a manageable strategy. At Ciment Law Firm, PLLC, The Debt Defenders, we analyze borrowers’ student loan predicaments to strategize workable paths toward resolving their debt burdens. We will incorporate these developments into our clients’ student loan debt strategies. Texans who have questions regarding student loan forgiveness programs are welcome to contact us, and we can discuss their options with a free consultation.”
For more information, visit https://cimentlawfirm.com.
About Ciment Law Firm, PLLC, The Debt Defenders
Ciment Law Firm, PLLC, The Debt Defender’s goal is to help clients resolve their unpaid debts, protect their rights in the process, and help them rebuild their credit so that they can move on with their lives. Everything Ciment Law does is designed to help clients get on the path to financial wellness, and the 7 Steps to a 720 Credit Score program is one way to help clients on their path.