The Biden administration has announced eligibility criteria for its new Student loan cancellation program, bringing hope to many US borrowers.
The plan seeks to fulfill President Biden’s campaign promise of relieving the student debt burden. It offers substantial loan forgiveness to eligible borrowers, a crucial step in tackling the long-standing student debt crisis.
Eligible for Student Loan Forgiveness
Income Threshold: Borrowers with an adjusted gross income (AGI) of $125,000 or less are eligible for full loan forgiveness. Those with an AGI between $125,000 and $250,000 will receive partial forgiveness on a sliding scale, with higher-income individuals receiving less relief.
Federal Student Loans Only: The loan forgiveness program applies exclusively to federal student loans, including Direct Loans, Federal Family Education Loans (FFEL), and Perkins Loans. Private student loans are not eligible for forgiveness under this program.
Delinquency Status: Applicants must be current on their federal student loan payments. Borrowers who are in default or have delinquent loans may need to rehabilitate their loans to become eligible.
Public Service Loan Forgiveness (PSLF) Recipients: Borrowers who have been participating in the PSLF program and meet its criteria will be eligible for additional relief on top of their existing PSLF benefits.
Forbearance and Deferment Status: Time spent in forbearance or deferment due to economic hardship, military service, or other eligible reasons will count toward the forgiveness period.
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Advancing Accessible and Affordable Higher Education
This program is expected to provide substantial assistance to low- and middle-income individuals, reducing the financial strain caused by student loan debt.
President Biden, in a recent statement, emphasized his commitment to easing the burden on borrowers, noting that “education should be a path to opportunity, not a barrier to success.”
The implementation of this loan forgiveness program is a significant step forward in the Biden administration’s broader efforts to make higher education more accessible and affordable for all Americans.
As the eligibility criteria are finalized and the program rolls out, millions of borrowers will be closely watching to see how it will impact their financial futures.
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