Biden forgave my student loans. Now what?

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If you’ve been scrolling through TikTok or Instagram lately, you’ve probably seen all sorts of reactions regarding Biden’s student loan forgiveness plan.

Some are happy and some are frustrated. And many are just confused.

Despite all the coverage of Biden’s plan, borrowers still have more questions than answers. I know this because I received dozens of questions from readers about student loan forgiveness last week. I’ve done my best to search for answers, but the questions keep coming.

A reader wrote to me last week: “So happy with the news!” She immediately followed that thought up with, “Certainly very curious about what the release schedule for the app will be and what kind of information the app will require.” If you have questions about federal student loans and are reading this, check out our FAQs.

To recap what happened last week: President Biden laid out a sweeping plan to forgive up to $20,000 in federal student loan debt per borrower. To qualify for the $20,000 rebate, individuals must earn less than $125,000 per year, or less than $250,000 per year for couples, and must have received a Pell grant (or more) in college. Borrowers who have other federal loans and who meet these income requirements are eligible for a $10,000 forgiveness. The Biden administration is also extending the federal student loan payment pause for a “final” time through December 31, 2022.

So, it’s official. Now what? Well, naturally, borrowers want to know when they can expect their debt to be forgiven. Borrowers (myself included) are eager for more information, but we have at least a few important dates for student borrowers to keep in mind in the weeks and months ahead. Here’s a quick overview:

  • Early October: student loan cancellation requests go online
  • November 15, 2022: Apply for student loan forgiveness before this date to receive relief before the end of the year
  • December 31, 2023: Student Loan Forgiveness Application Closed

The best way to manage uncertainty about exactly how student loan forgiveness works is to stay up to date with the process. Keep your contact information up to date with your loan officer, sign up to receive email updates from the Department of Education (select “NEW!! Federal Student Loan Borrower Updates”) and follow my student loan coverage.

The essential

Use this “final” extension of the student loan break to prioritize other financial goals, like building an emergency fund, paying off high-interest debt, or investing. long-term. These are areas where you can put your money to work right now.

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