COLUMBUS, Ohio (WCMH) — Starting this month, the Biden Administration is offering debt relief to millions of Americans working to pay off their student loans.
The student loan forgiveness plan would cancel up to $10,000 in debt for individual borrowers, or $20,000 for those who received Pell Grants.
“About 8 million people are already going to be forgiven, without having to do anything, and that’s just simply because the government already has their loan information and income information in order to forgive that,” said Kimberly Wells, owner of Young Wealth Management, a financial planning firm in Columbus.
Wells said millions of borrowers will already qualify for student loan forgiveness due to being registered through the government.
For those who are not sure, she said you can simply check online or submit an application once it’s released to the public later this month.
“If you want to see if your loans are eligible, you can go to the studentaid.gov website,” Wells said. “You’re going to log in, click on ‘my aid,’ and it will show you what type of loans you actually have.”
However, it’s important to make sure you qualify first, because only those with federal loans and who fall within the income limits of $125,000 per year or $250,000 per married couple are eligible.
Once you’ve determined that, Wells said it’s important to submit that application as soon as possible.
“Really try to get that done by Nov. 15, and the reason being is because they’re saying it should take about six weeks to see that forgiveness credited, and that’s going to bump you right up against that January date, which is when the loan payments are set to start resuming again,” Wells said.
Due to the pandemic, the federal government put a pause on all student loan payments up until Dec. 31. To have your balance addressed before then, Wells said it’s best to apply before mid-November. However, for those who already paid off their student loans during the federal pause, she said they’re eligible for refunds as well.
“If you paid off those loans after March 13, 2020, which is when this all began, you can actually apply for a refund, and then go ahead and apply for student loan forgiveness,” she said. “So if you were someone who was ahead of the curve and paid off those loans, don’t worry. You’re not going to be left out.”
Applications for student loan forgiveness will be available until the end of 2023.