Here’s who habit qualify for $6.2 billion in student loan cancellations.
Here’s what you need to know – and what it means for your student loans.
There’s good news for student loan borrowers: President Joe Biden will call in $6.2 billion in student loans. However, you may be wondering if you qualify for this student loan waiver. While 100,000 student loan borrowers are expected to qualify for this student loan cancellation, it’s important to understand who does not qualify for a $6.2 billion student loan forgiveness.
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Here are 3 types of student loan borrowers who will not have student loan forgiveness:
1. You are not seeking student loan forgiveness
The $6.2 billion student loan forgiveness isn’t automatic. You must seek student loan forgiveness. Specifically, this student loan cancellation applies only to the Government Loan Forgiveness Program. (Biden could deliver a student loan cancellation and a student loan payment pause). This program is available to student borrowers who work full-time for a qualified government service or non-profit employer. You must meet several requirements, including being enrolled in an income-tested repayment plan and making at least 120 monthly student loan payments. If you haven’t signed up yet, it’s not too late to start. While you may not qualify for this $6.2 billion student loan forgiveness, you may still qualify for full student loan forgiveness on your state student loans. Contact your student loan administrator for details. Be sure to submit an employer certification form to the US Department of Education each year and each time you change jobs.
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2. You are not entering into a limited student loan forgiveness waiver
If you’re currently seeking student loan forgiveness, the easiest way to not qualify for student loan forgiveness is to forget about this one thing. You must complete a limited student loan forgiveness waiver. In October, Biden announced significant changes to student loan forgiveness that will allow more student borrowers to forego a student loan. If any of your previous federal student loan payments went uncounted, this is your opportunity to get a retroactive loan. For example, if you’ve made a late or partial student loan payment, this is your opportunity to receive a credit for your 120 required monthly student loan payments. If you made student loan payments while enrolled in the wrong student loan repayment schedule, you can now count those student loan payments. However, you only have until October 31, 2022 to complete the temporary waiver.
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3. You have private student loans
With private student loans, you are not eligible for student loan forgiveness. Unfortunately, private student loans are excluded from this $6.2 billion student loan waiver. Similarly, this is true of most student loan forgiveness programs that focus on state student loans. However, if you have both private and state student loans, your state student loans may still qualify for student loan forgiveness.
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Student loans: next steps
It is important to understand who benefits from this student loan cancellation and who does not. The good news: Biden canceled more than $15 billion in student loans, more student loan cancellations than any president in history. Her next step is to plan to resume payments on federal student loans beginning after May 1, 2022. This means that you should evaluate all of your student loan repayment options based on your individual financial situation.
Here are some popular strategies for saving money on your student loans: