What Does the Recent Student Debt Relief Plan Mean For You?
After the announcement of the Biden-Harris Administration’s student debt relief plan, we reached out to our financial wellness partner, GradFin, to get answers to borrowers' frequently asked questions.
Your financial wellness is an important part of your overall health. According to the U.S. Department of Education, there are 77,000 federal student loan borrowers in Vermont, with an average loan balance of $37,000. With the recent announcements of our partnership with GradFin and the Biden-Harris Administration’s student debt relief plan, we hope Vermonters carrying the burden of student loans are feeling optimistic about their financial future.
Biden-Harris Administration Student Debt Relief Plan
In August, the Biden-Harris Administration announced its student debt relief plan. This plan includes a final extension of the emergency student loan payment pause, targeted debt relief for low- and middle-income families, and efforts to make the student loan system more manageable in the future.
If you have questions about this plan, you’re not alone. We reached out to our financial wellness partner, GradFin, to see what questions are top of mind for their clients. Here’s what they shared.
Frequently Asked Questions
What do I need to do to get $10,000 or $20,000 forgiven on my federal loans?
To qualify, you must be an individual making under $125,000 or a household making less than $250,000. Those who have Pell Grant loans can receive $20,000. Those who do not have Pell Grants can receive $10,000 in debt relief.
The Biden-Harris Administration is expected to launch an application process in October 2022. Borrowers will then have until December 21, 2023 to apply for relief. Once a borrower completes the application, they can expect relief within four to six weeks.
Will $10,000 be forgiven for my private loans, or is this just for federal loans?
In this plan, private loans will not be forgiven. Refinancing and consolidation are your best options to save thousands of dollars over the course of your loan.
Will the Public Service Loan Forgiveness (PSLF) waiver be extended past October 31?
At this time, the PSLF waiver announced in response to COVID-19 in October 2021 is not expected to be extended past October 31, 2022. The PSLF program forgives the remaining balance on federal loans after making 120 qualifying payments for those working for federal, state, tribal, or local government, military, or non-profit (501c3) organizations. With the current waiver, any payment made prior to enrollment will count as a qualifying payment. Enrollments after November 1, 2022 will not be eligible. With only two months left to take advantage of this waiver, only 10 percent of those eligible for the PSLF program have enrolled. If you think you may be eligible, we encourage you to enroll before the deadline.
Next Steps for Borrowers
Blue Cross members, as well as those living in the insured’s household, now have access to GradFin student loan services.
GradFin services include:
• Public service loan forgiveness membership
• Student loan financial education
• Student loan solutions
You can get your specific questions answered by signing up for a free one-on-one consultation. Make sure you have access to your student loan information including balance, current monthly payment, and interest rate when signing up.