COLUMBUS, Ohio (WCMH) — The application portal for student loan forgiveness officially launched Monday, meaning Ohioans with federal loans are among the millions of people across the country now able to request relief for at least a portion of their debt.
At a news conference Monday, President Joe Biden announced the application portal would be made available for the one-time forgiveness program starting directly after the conference. The U.S. Department of Education first rolled out a beta testing version of it over the weekend, which drew in more than 8 million applications already.
Biden called the program — first announced this summer — a “game changer” for Americans with higher education debt.
Aside from Washington, D.C. residents, Ohioans are the most likely of borrowers in any other state to have debt from higher education, according to a study by the Education Data Initiative — although other states have higher averages of debt per borrower. Federal student loan debt in Ohio totals $62.3 billion, with an average of close to $35,000 owed per person.
While the program has created a lot of buzz since its announcement, Brian Houts, a partner and chief financial planner at Columbus-based wealth-planning firm Frazier Financial, said it isn’t a single solution for people saddled with student debt, or for those considering whether the cost of college is worth it.
“That equation is different for everybody,” Houts said.
He added that, while it addresses debt for a large number of people in and out of Ohio, a lot of people have questions about whether they qualify.
Who qualifies, and for how much?
According to the Department of Education, relief an individual could receive depends on the types of federal loans they took out, their income status, and whether they received a Pell Grant while attending school, among other factors.
A number of federal loans are eligible, as long as they were disbursed before June 30 of this year. Those include:
- Direct loans
- Some Federal Family Education Loan (FFEL) Program loans
- Some Federal Perkins Loan Program loans
- Some defaulted loans
Non-federal, private loans do not qualify for relief under the program.
Borrowers also need to meet certain income criteria for their adjusted gross income from either 2020 or 2021 to be eligible. For individuals who are single or married but did not file their taxes jointly, the ceiling is $125,000. For families and those with other tax filing statuses, it cuts off at $250,000.
Pell Grants, which are federal need-based subsidies, determine how much someone could receive in forgiveness under this program. People who did not receive a Pell Grant in college are eligible for up to $10,000, and Pell Grant recipients are eligible for up to $20,000.