(WSPA) – We’ve heard a lot of talk about a student loan debt forgiveness program this fall, but it’s now been put on hold for a few weeks.
The program faces dozens of lawsuits, one of which is from six states, including South Carolina.
thursday evening, Federal Judge Denies President Biden’s Student Loan Forgiveness Programdeclare it illegal.
The Biden administration appealed the ruling on Friday. The lawsuit is before the United States Court of Appeals for the Fifth Circuit.
That appeals court could remand the case to a lower court or rule in favor of the Biden administration.
Either side may eventually request that the case be brought to the Supreme Court.
So should you still apply? Do you really need help with your application? Scammers think so.
In this 7NEWS Consumer Exclusive Loan Forgiveness Update, we explored what you need to know about the current process.
26 million people applied
If you have big dreams like Wofford sophomore Colby Garner, $10,000 in debt relief is a blow to the arm.
“Being debt free after college is a huge part of the process of applying to medical school and becoming a doctor,” says Garner.
Garner is one of 26 million people who have filled out an application for debt relief so far. StudentAid.gov.
This process takes about 5 minutes. You don’t even need to be logged in. Just enter your name, social security number, date of birth and contact information.
Wofford’s director of financial aid, Carolyn Sparks, said: “If you haven’t heard anything from us, everything should be fine and we don’t need any more information.
Sparks says the process is much easier than actually applying for a loan, but there are important aspects borrowers should keep in mind.
The final deadline for applications is December 31, 2023.
You still need to apply by mid-November 2022 to begin debt forgiveness before the moratorium on loan payments ends on December 31, 2022.
Speaking of which, Sparks said college financial aid offices around the country are worried that people who aren’t used to making loan payments will default quickly.
“My biggest fear, which is now being discussed, is that suddenly they will have to start paying off their student loans…I worry about that.”
Another source of concern is fraud.
Jennifer Geesik of Spartanburg County has been overwhelmed with calls and emails from companies claiming to help with her files for a fee.
“Until they get caught up in what you think, I can get help and eventually someone will understand. And you have to pay us $320 a year.” “And how many years did I say?
according to Ministry of Education“You don’t have to pay for federal student aid assistance.”
The Department lists these three e-mail addresses as the only legitimate ones sent by agencies to borrowers.
You can report attempted fraud to the Federal Trade Commission by calling 1(877) 382-4357 or by visiting: reportfraud.ftc.gov.
How are taxes affected?
One-time student loan debt relief is not taxed at the federal level, but some states may choose to tax it at the state level.
What if I am not eligible?
Unfortunately, for many borrowers, not everyone is eligible.
Private loan ended. Even hundreds of thousands of borrowers in the Federal Family Education Loan Program no longer qualify.
“These are all ultimately federally insured, so why would one be eligible and the other not,” said Amanda Griffeth of Simpsonville.
Griffeth signed petition Requests the federal government to return the FFELP program to the list of eligible loans.
“It just seems unfair. It’s a lot like a bait and switch,” Griffeth said.
So far, 16 million of the 26 million applicants have already been approved, but whether or not their loans are forgiven will depend on the outcome of these lawsuits, some of which have been filed by the U.S. Supreme Court. already dismissed by the court.