The pandemic-induced pause in federal student loan repayments will end soon, at some point this summer. Borrowers can expect payments to resume 60 days after the Supreme Court’s decision on the Biden administration’s debt-forgiveness proposal, expected sometime in June.
A student loan freeze imposed by the Trump administration was extended by President Joe Biden when he announced the student loan forgiveness measure last summer. But Republican state officials and conservative organizations immediately challenged the legality of the debt relief initiative, forcing the Biden administration to suspend aid applications in October.
Here are some answers to key questions about federal student loan forgiveness, loan repayment, and other information about student loans and Pell Grants to help you prepare.
What is Biden’s student debt forgiveness program?
The Biden administration’s one-time debt forgiveness program is a pandemic relief measure that could waive up to $10,000 for all borrowers and up to $20,000 for Pell Grant-eligible students. Critics say it penalizes taxpayers who don’t go to college and will worsen rising inflation.
Is there an update on the student loan forgiveness plan?
In October, the Biden administration halted applications for its one-time federal student debt repayment program when the courts blocked it after a legal challenge. Government lawyers are now fighting to overturn the block. The Supreme Court has heard oral arguments in the case and is expected to rule by the end of June.
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How do I apply for student debt forgiveness?
If you missed the window to apply for debt forgiveness, you can still sign up for news about the lawsuit and file if the Supreme Court allows the forgiveness program to be reinstated. Learn more and sign up for updates here: https://studentaid.gov/debt-relief-announcement
When do federal student loan payments resume?
The Supreme Court is expected to rule by the end of June on whether Biden’s loan forgiveness program is constitutional. If the decision is made in June, students will have to begin repaying your loans 60 days after the decision. Unless the Supreme Court rules in June, students will begin repaying their loans 60 days after June 30.
How about private college loan forgiveness?
The federal loan forgiveness program does not affect student loans secured by private lenders. However, students can try to talk to their lender about getting a better rate or consolidating loans make a monthly payment or when your credit score improves.
What other plans are there for student loan debt relief?
New rules proposed by the federal government and still under review could make monthly payments lower and more manageable for current and future low- and moderate-income borrowers.
Permanent changes that simplify eligibility criteria, help borrowers move toward repayment faster, and allow for adjustments to the Public Service Loan Forgiveness Program, or PSLF, will take effect in July 2023. One-time rejection On October 31, 2022, we temporarily implemented some of these changes.
What is the Public Service Loan Forgiveness Program?
The PSLF program forgives the balance on your Direct Loans after you have made 120 eligible monthly payments under an eligible repayment plan while working full-time for an eligible employer, in accordance with Federal student aid site.
In October, the Biden administration overhauled the program for granting loans for public services. Over the years, thousands of borrowers have applied for forgiveness under the program, but the federal government has turned down a large number.
How do I apply for a Pell Grant?
Low- and moderate-income families can qualify for PELL grants, but they must complete the FAFSA to do so. Millions of Pell Grants are awarded each year to eligible undergraduate students who submit the Free Application for Federal Student Aid (FAFSA) form. Don’t miss it. Learn more here: https://studentaid.gov/articles/dont-miss-out-on-pell-grants/
Federal Pell Grants are generally awarded only to undergraduate students who demonstrate exceptional financial need and have not earned a bachelor’s, graduate, or professional degree. A federal Pell grant, unlike a loan, does not have to be repaid except in certain circumstances. Find out why you may have to pay back all or part of your federal grant. You cannot receive Federal Pell Grant funds from more than one school at the same time.
What is the maximum Pell Grant award?
For the 2023-2024 academic year, the maximum Pell Grant award is $7,395, according to studentaid.gov. Pell Grants are awarded for up to 12 full semesters, or about six years, to pay for two-year community colleges, vocational schools, online schools, and four-year colleges and universities.
How is financial need determined in a Pell Grant?
The term “financial need” does not mean that you are not eligible for a Pell Grant. Your financial need is based not only on income, but also takes into account family size, family income and the number of students in college.