UPDATE:
SLFP is currently paused!
On Wednesday August 24th, 2022, Democratic President Joe Biden signed the Student Loan Forgiveness Plan and the world as we know has divided itself again. Of the many groups, the leading ones are the ones who are upset that their loans are not getting paid off, those that believe that the loans are not the responsibility of no one except the student or the parent who obtained the loan, the ones that believe the amount of $10k per student with a Government loan is too low, and those that are just happy that something is happening in their favor. No matter what side of the world yo may sit currently, it happened, and someone you may know will need to determine if they qualify and can apply come late October/early November.
Some of the key talking points of the American Rescue Plan are:
Using the authority Congress granted the Department of Education, they will forgive $10,000 in outstanding federal student loans for people who earn less than $125,000 a year.
In addition, students who make under $125,000 a year and received a Pell Grant (had to qualify by earning less than $60k at the time of FAFSA), you’ll get an additional $10,000 reduction off that total for a total of $20,000 relief.
Ninety-five percent of the borrowers can benefit from these actions. That’s 43 million people.
Of the 43 million, over 60 percent are Pell Grant recipients. That’s 27 million people who will get $20,000 in debt relief.
Nearly 45 percent can have their student debt fully cancelled.
Student loan forgiveness is Federally Tax-Free through 2025
Since this is unprecedented, 13 States may or may not use rolling conformity with Federal Tax Cancelled of Debt and trigger a Tax Bill upwards of $1100. These states include: Arkansas, Hawaii, Idaho, Kentucky, Massachusetts, Minnesota, Mississippi, New York, Pennsylvania, South Carolina, Virginia, West Virginia and Wisconsin. To confirm about your state, it is best to consult a Professional. The good folks at Herij Taxes (https://herijtaxes.com) offer Virtual services for these states and can help as needed.
How do we pay for it? Per President Joe Biden: “We pay for it by what we’ve done.” Cited: The White House Briefing Room 8/25/2022
