How Loan Forgiveness Affects SRU
At the start of COVID-19, many students didn’t quite have the college experience they were looking for. Many students fell behind and had to withdraw extra money to make sure they could afford to have the tools they needed at home. The students didn’t expect to have to be online for an entire year without a lot of human contact. President Joe Biden’s administration wants to ensure that loans students took out during this time can be forgiven.
COVID-19 paved the way for a suspension of student loans in 2020. This deadline has been extended until December 31, 2022.
“Current students and borrowers who have federal undergraduate, graduate and parent plus loans that were distributed on or before June 30, 2022 are eligible for relief,” Megan Walter, policy analyst for National Association of Student Financial Aid Administratorssaid.
You are still entitled to loan forgiveness if you have not completed your studies.
For current students, the Department of Education will have earnings data from FAFSA 2021-2022. The Department of Education will refer to parental income information for dependent eligibility.
According to White House Fact Sheet, single borrowers earning less than $125,000 and households earning less than $250,000 are eligible for a $10,000 loan forgiveness. Borrowers who suffer from income gaps or who have received the Pell Grant can receive an additional $10,000.
For students who have submitted FAFSA, the income data is already in the system and on file. If unregistered, borrowers can apply in early October 2022. Borrowers can expect relief within four to six weeks of applying. The Ministry of Education suggests applying by November 15, 2022, but you have until December 31, 2023 to apply.
When applying, borrowers can use either 2020 or 2021 tax return information when applying.
When speaking with Slippery Rock University Financial Aid Office Director Alyssa Dobson, she said that approximately 37% of SRU students receive the Pell Scholarship. Students who receive the Pell Scholarship receive a total of $20,000. Students who do not receive the scholarship receive $10,000.
“There’s no way to calculate what students borrowed from a private loan, but we do know that about 84% of students borrowed from all kinds of loans this year,” Dobson said.
Loan forgiveness only applies to Federal and Parent Plus loans. Personal loans are exempt. Loan forgiveness is capped at what is owed. Students who owe $7,000 will only receive what they owe. The remaining $3,000 goes to the government.
Borrowers can contact their loan servicer to request a refund of payments that were made during the COVID-19 pause beginning March 13, 2020. If borrowers choose to do so, the money will be added to the original loan balance.
Debt relief is not federally taxed. Pennsylvania has no legislation in place that will tax it.
The civil service loan forgiveness is very different from the Biden loan forgiveness. According FAFSAPSLF is used when you work full-time in your field of study, make 120 balance payments, are employed by a U.S. federal, state, local, or tribal government or nonprofit organization, have direct loans (or consolidate other federal student loans into a direct loan, repay your loans under an income-driven repayment plan.