What Is A Student Loan

Eligible Under The Biden Student Loan Forgiveness Plan? Find Out!

6 Mins Read September, 09 2023 Posted by Nilanjana Basu

An average American with student loan graduates with $25000 in debt. With a new career ahead of you and the rest of your life ahead, would you really want to have the weight of a student loan on your shoulders? No right? Read on!

Did you know that since 1980 the cost of education in the United States has nearly tripped? Federal support is simply not enough in 2023. The Pell Grants, which were once upon a time nearly enough to cover all costs of a 4-year college, now only cover one-third of the total costs. This has left the common American population with middle to low income with no other choice but to head to the banks and other Institutions for loans.

President Joe Biden had once announced that the government would cancel student loans for people who were struggling to make ends meet. The official White House page states that the word has been kept as the three-part plan has taken effect on Biden’s promise to help students out. $10,000 has been canceled off the student debts for students belonging to the low to middle-income groups.

A post on the White House official page was made on the 24th of August, 2022.

It states that the Biden administration follows through on the promise of “helping families out” after the “economic crisis brought on by the pandemic.”

Initially, the potential for Republicans to initiate legal action against the policy was considered. Lawsuits followed, too; however, none of it could put the relief at risk.

So, let us now dig deep to find out all about the Biden student loan forgiveness plans, Biden student loan debt relief plans, student loan pause plans, and student loan cancellation as well!

What Is A Student Loan?

If you are a student who is about to take an educational loan, let me first tell you what a student or an educational loan is. It is a type of financial assistance taken by students to pay for expenses relating to their education and degrees. It can include tuition fees, capital required for textbooks and stationery items, and even expenses acquired on living.

A student or an education loan specifically differs from scholarships for grands because these have to be repaid along with interest on the principal loan amount.

Student loans usually cover all costs related to the institution you study in. These loans are usually registered and issued by the US Federal Government. Student loans are also provided by private banks, but the ones issued by the Federal government need you to meet certain requirements first.

What Are The Most Common Types Of Federal Loans?

The most common type of federal loans constitute:

  1. direct unsubsidized loans and subsidized loans, 
  2. PLUS loans and 
  3. loans for parents and students.

Qualification For A Student Loan

In order to qualify for a student loan, you must be enrolled at an educational institution, full-time or part-time.

  • The educational institution should be credited under the government or at least be recognized as a college, university school, etc.
  • If you are applying for a student loan from a private bank, you may also need a guarantee who will repay the loan on your behalf if you can’t do it.
  • Federal loans often have limits beyond which you cannot take any more loans.

Recent Updates: Biden Student Loan Forgiveness Plan

In August 2022, President Joe Biden made on Federal Student Loan Forgiveness. Now we will discuss all these upcoming loan waivers, pauses, loan forgiveness, and other new details that we have uncovered on how this plan will work out.

  • The White House released an official statement through a 25-page memorandum by the U.S. Department of Justice. The statement was in support of debt forgiveness plans of the US Government under the leadership of Joe Biden. It stated that this student loan forgiveness plan aligns with the provisions of the Heroes Act of 2003.
  • The HEROES Act of 2003 is very important when it comes to student loan forgiveness in the United States. The Health and Economic Recovery Omnibus Emergency Solutions Act was brought into force in response to the September 11 terrorist attacks. It gives authority to the President of the United States to make changes to the existing student loan programs during periods of national emergencies.
  • The Act also empowers the federal government to forgive student loans during times of crisis. The president can help students out in times of national emergencies when it becomes difficult for them to cope with inflation and employment loss.
  • The circumstances that emerged during the Covid-19 pandemic led to the groundwork for Mr. Joe Biden to utilize the provisions of the Heroes Act and deliver the statement on loan forgiveness.
  • The policy of loan forgiveness was criticized for its lack of clarity. However, experts say that borrowers should remain informed about the proceedings and ensure they follow all required procedures.

So, who qualifies under this loan forgiveness plan, and even how can you apply for it? Let us answer your questions about it.

What Amount Of Debt Is Relieved?

Joe Biden’s announcement stated that most borrowers of federal student loans will have the opportunity to receive partial forgiveness. This, however, varies on if students did or did not receive the Pell Grant.

  • A Pell Grant is a type of financial aid meant to help out low-income undergraduate students. For students that did not receive the grant, this loan waiver could lead to up to $10,000 in forgiveness. However, if the student did receive a Pell Grant, the forgiveness amount might go up to $20,000.
  •  Any individuals earning less than $125,000 per year or married couples and heads of households with earnings below $250,000 can qualify for this loan forgiveness.
  • If you want to verify whether your income falls within these criteria, try to review your recent tax returns. The U.S. Department of Education will be considering your adjusted gross income (AGI) and not just your salary. To calculate your tax returns and eligibility under the student loan forgiveness plan, go through the front page of your tax return, commonly known as Form 1040.

How To Check If You Qualify?

If you want to immediately find out whether you qualify, you can visit the StudentAid.gov website. Next, look for the “federal direct consolidation loan application.” However, do note that all private student loans are excluded from the president’s loan forgiveness plan.

Final Word: Where Does Student Loan Forgiveness Stand In 2023?

Several Republican lawmakers contested President Joe Biden’s decision to forgive student debt. This led to multiple lawsuits, with strong opposition coming from GOP attorneys general in states like Arizona, Missouri, and Texas. 

  • Notable figures connected to the conservative think tank, the Heritage Foundation, also took steps to prevent loan forgiveness. They argued that widespread loan waivers might create uncertainty for borrowers and harm the economy.
  • Important developments have taken place. A federal district court dismissed a lawsuit that aimed to challenge student loan forgiveness. This was a big win for borrowers and the Biden administration. Borrowers who applied and qualified under this program have already received discharges, and the Education Department has sworn to give more debt relief in the near future.

However, these programs have also faced some issues due to complex rules and poor loan servicer administration. They have been called out on insufficient government oversight. In turn, President Biden has introduced Account Adjustment procedures to address these problems. With this, borrowers will have proper time in hand to apply for loan forgiveness. This could help some borrowers qualify for forgiveness sooner. 

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Nilanjana Basu

Nilanjana is a lawyer with a flair for writing. She has a certification in American Laws from Penn Law (Pennsylvania University). Along with this, she has been known to write legal articles that allow the audience to know about American laws and regulations at ease.

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