Student Loan Forgiveness Program Deadline Approaching!
California Residents Have Until Tuesday to Join Student Loan Forgiveness Program
The Biden administration is giving Californians a chance to get rid of some or all of their student loans from private banks. But they have to move quickly because the deadline is Tuesday and this deal is for people in certain payment plans or who work in public service. Parents who borrowed money through a specific program can also qualify. It’s the last chance for people to join a program started by the administration to reduce student debt.
This program started in 2022 to fix problems with loan companies not keeping track of payments properly. It also helped people who work in public service jobs. Last year, the Education Department looked at payment records and forgave some or all of the debt for people who qualified. They didn’t need to apply but it happened automatically. About 3.6 million borrowers got credit for extra payments getting them closer to having their debt forgiven.
Some people pay a percentage of their income every month for their loans. If they keep up with these payments, they might get their remaining debt forgiven after a certain number of years. This program is especially for people who work in public service jobs. But even if they’re not in this program, borrowers might get their debt forgiven after 20 or 25 years of payments.
But this forgiveness program only looked at loans from the federal government, not private banks. Now, borrowers with loans from private banks have one last chance to join. They can do this by combining their loans into a federal direct consolidation loan before Wednesday. This will make their previous payments eligible for review.
To do this, borrowers need to apply online before Tuesday’s deadline. Even if they don’t get approved right away, they can still qualify. The Education Department will give them credit for the time when payments were paused due to the pandemic, which is about three years’ worth of payments. They’ll also get credit for payments made under other repayment plans and times when they couldn’t make payments. If they meet certain conditions their remaining debt will be forgiven , according to the published article of LA Times.
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(photo: ThoughtCo)
Hope for Student Loan Borrowers: Biden Administration Introduces Relief Measures Despite Supreme Court Decision
Although the Supreme Court said no to Biden’s plan to forgive debt for millions of borrowers, the administration has other ways to help. They’re working on rules to reduce debt for about 30 million borrowers. Plus, they’ve introduced a new repayment plan with lower monthly payments and less interest. So even though the big plan got rejected, there’s still hope for borrowers struggling with student debt.
