The US federal government offers student loans to assist students in their education and other expenses. The Biden administration announced the loan forgiveness amidst the pandemic. Millions of student loan borrowers struggle financially due to extreme circumstances.
President Biden and the US Department of Education have made six significant changes in the necessities for the loan exemption. The borrowers need to be aware of the changes and act accordingly. Forbes reports that the government has changed the parameters to accommodate more beneficiaries in the loan forgiveness program. The government looks to provide a financial cushion to the individuals.
Borrowers must fulfill the eligibility criteria
Forbes reports that individuals opting for public service loan forgiveness will receive a total exemption on federal student loans. The borrowers need to fulfill specific parameters to qualify for the benefits; they must have made 120 monthly student loan payments and signed up for an income-driven repayment plan.
The beneficiaries should have worked for a non-profit organization. The US Department of Education announced that only Direct Loans are considered in this program. Only student loan borrowers are eligible for forgiveness. The loans should be under the Standard Plan or an income-driven repayment plan. The borrowers must make loan repayments before the due date to be eligible.
Beneficiaries should be aware of the rules
The employed borrowers must have a full-time job with a minimum of 30 hours a week. The beneficiaries need to provide essential details to the US Department of Education. The beneficiaries should work under an eligible employer during the application and the student loan forgiveness. Forbes reports that the borrowers can request loan forgiveness till October 31 this year. Individuals should check their eligibility as per the US Department of Education rules.
The department also considers ineligible loan payments for a limited time; the borrowers need to check complete details. The borrowers with credit for the loan forgiveness and made repayment on a Direct, FFEL, or Perkins Loan can also enjoy loan exemption.
Before the student loan consolidation, the beneficiaries with loan payments are eligible despite a wrong repayment plan. The department also considers late payments and loan payments with lesser amounts. Unemployed borrowers can also apply for loan forgiveness for a limited period.