If you have a current student loan borrower in your family, here’s what you need to know:
If your child took out loans that were dispersed by June 30, 2022, they’ll be eligible for loan forgiveness.
Most likely, that means if you have a current college student, loans for their education up to and including this school year will be eligible for the forgiveness program. That’s great news for today’s college students.
This is not a good reason to get into more debt for future years.
There’s no guarantee that the student loan forgiveness program will be extended in the future; in fact, there are many reasons to think it won’t be. So students who are taking on loans for future years should assume they’ll have to pay them off in full.
You’ll have to apply online to receive the loan reimbursement.
While reimbursement will be automatic for families whose financial information is already on file with the U.S. Department of Education, everyone else will have to fill out a form online. To make sure you receive your money, it’s a good idea to fill out this form no matter what. The form hasn’t opened online just yet, but if you want to be the first to know when it does, sign up for updates from the U.S. Department of Education. (We’ll let you know, too!)
The Biden-Harris administration is working on steps to make continued education more affordable.
A proposed new rule would create an expanded income-driven repayment plan, which would limit the amount borrowers have to pay out of their monthly income toward their loans. This plan would also forgive loan balances after 10 years of payments, rather than 20. We’ll keep you posted!