If you have student loan debt, you’ve probably heard about the new Biden administration’s plan to provide financial relief to low- and middle-income Americans who are still in debt with federal college loans.
Biden’s student debt relief plan, announced in August, cancels up to $20,000 of federal student debt for Pell Grant recipients and up to $10,000 for other eligible borrowers.
The Loan Relief Program is available to current undergraduates, graduate students, and graduates, as well as parents who have taken out federal loans for their child’s college education. To qualify, you must fall within certain income limits and still have a Department of Education-held loan that was taken before June 30, 2022.
Although UC’s undergraduate debt is less than the national average (half of its graduates have no debt at all), UC’s preliminary estimates suggest that the plan would draw about 60,000 current students and 200,000 UC alumni. It could provide great relief to 260,000 people, including
More than 40% of them will have their debts wiped off completely, and about 33% will have their debts reduced by more than half.
UC estimates include only alumni who live in California and graduated in 2008 or later. It also does not include parents who are eligible for relief.
So how can you benefit from the program? Here’s what you need to know.
This plan is aimed at low and middle income households.
The program is open to individual applicants with an annual income of $125,000 or less and married borrowers with an annual income of $250,000 or less.
Eligibility for dependent students (students listed on their parents’ tax returns) is based on their parents’ income. For self-taught students, it is based on the student’s income.
If you have outstanding debt from a qualifying loan and meet the income requirements, you are eligible for the loan deduction. It doesn’t matter if you are actively repaying your loan, are in the grace period, or are in default.
Only 5 minutes.
Filling out the application form is easy.just go Federal Student Aid Website Complete the application, which takes about 5 minutes. No documents need to be submitted. A representative will determine your eligibility and contact you if further information is required.
The application deadline is December 31, 2023, but the sooner you apply, the lower your loan payments will be.
*Note: A court order has temporarily suspended the government from implementing the program. However, Federal Student Aid is still accepting applications and will expedite applicable debt relief as soon as legally possible.
There are other options for reducing student debt
UC employees (and others who work in certain public service areas) may qualify for the Public Service Loan Forgiveness (PSLF) program. It provides full or partial loan forgiveness for individuals enrolled in a 10-year income-based repayment program and employed as government employees.
learn more about Public Service Loan Forgiveness Program.
Current and future students should: Free Application for Federal Student Aid (FAFSA) To make sure they receive all the financial assistance they are entitled to. Approximately 70% of undergraduate students at the University of California receive grants and scholarships to help with college expenses. This is money that does not need to be repaid. And 55% receive sufficient aid to cover system-wide tuition and fees.
Options such as work studies and community service programs #Californians for All College Corps Paid research opportunities also help offset costs.
Click here for details UC Financial Aid.