5 Key Pieces of Biden’s 2022 Student Loan Relief Plan
Millions over 50 struggle to pay off their student loans. Learn more about updates to Biden’s relief plan, and what you can do with Parent PLUS loans.
Currently, nearly 6 million Americans qualify for student loan relief. If you’re curious about student loan forgiveness or getting your loans canceled, Biden’s updated student loan relief plan could benefit you in big ways.
In this 5-minute read, I cover these key pieces of Biden’s 2022 student loan relief plan:
The new student loan repayment and interest pause deadline
The PSLF waiver deadline
Student loan cancellation
The new IDR (income-based repayment) plan option
Will Parent PLUS loans be forgiven?
#1: The student loan repayment and interest pause has been extended through 2022.
Biden's loan payment and interest pause has been extended to the end of the year. We’ve heard the word “final extension” before, but the language here is pretty firm.
Plan to start payments again this January (2023). There hasn't been official word yet on when income recertification will be due.
There are 2 important deadlines: PSLF waiver applications are due October 31st, 2022 and student loan repayment begins again in January of 2023.
#2: PSLF waivers didn’t receive an extension.
The PSLF (Public Service Loan Forgiveness) waiver deadline has not been extended. So, you’ll need to submit your waiver application by October 31st, 2022.
PSLF waivers are a limited-time adjustment to the standard rules of Public Service Loan Forgiveness. They allow federal loan borrowers who work in the public sector to receive PSLF credit for qualifying past payments.
Did you know Parent PLUS borrowers can qualify too?
You'll just need to perform a couple of loan consolidations first. Since this can take 30-45 days (and servicers are already backed up), you’ll want to move on this ASAP.
If you work in the public sector and haven’t taken advantage of tax-free PSLF benefits yet, don’t miss this opportunity!
You deserve credit for those past payments.
The clock is ticking here, so if you have questions about PSLF waivers or consolidating your Parent PLUS plans, book a free consultation with me and we’ll outline your application roadmap.
#3: Who qualifies for loan cancellation?
If you earn under $250,000 for a couple filing jointly, or under $125,000 as an individual filing single or married and filing separately, you’ll receive up to $10,000 in debt cancellation. If you're a Pell Grant recipient, debt cancellation is up to $20,000.
A simple application will be available in the coming weeks to apply. Here's how to sign-up for notifications:
Go to www.ed.gov/subscriptions.
Enter your email address and choose "Federal Student Loan Borrower Updates."
#4: A new IDR (income-driven repayment) plan is being developed.
So far, this is just a proposed rule, and nothing’s official yet. It could be an improvement, or it could be a dud.
My feeling is if you have grad loans and a high income, this new IDR plan will have limited benefits for you.
I’m very curious about this new feature, and I’ll be following it closely as new information emerges.
Parent PLUS loan borrowers can still benefit from loan cancellation, PSLF, or standard forgiveness.
#5: How does this plan affect Parent PLUS loans?
Parent PLUS borrowers didn't receive any extra help, but they can still take advantage of the pause extension and loan cancellation benefits.
Parent PLUS Borrowers in the Public Sector
If you have Parent PLUS loans and work in the public sector, look into Public Service Loan Forgiveness (PSLF).
PSLF can cut loan payments in half, but you’ll need to complete your loan consolidations and apply by October 31st in order to receive credit for past payments.
Parent PLUS Borrowers in the Private Sector
If you work in the private sector, standard forgiveness is still a possibility. Like PSLF, you’ll still need to consolidate your loans first, but the October 31st deadline won’t apply to you.
Standard forgiveness may have a longer repayment period, but I’ve still helped clients shave 5-to-6 figures off their student loan balance.
Under standard forgiveness, the forgiven balance is taxed, but there are several strategies you can use to reduce or eliminate this tax completely.
Conclusion
If you’re interested in student loan forgiveness and cancellation, be sure to note these updates:
No matter your employer, you can get up to $10,000 in student loan cancellation if you earn under $125,000 filing single, or under $250,000 filing jointly.
If you work in the public sector, you have until October 31st, 2022 to apply for PSLF and receive credit for past payments.
If you work in the private sector, you can still explore standard forgiveness and payment assistance programs.
All student loan payments and interest resume in January 2023.
Remember, the sooner you take action, the sooner you can lower your monthly payments, payoff your loans, and enjoy your golden years!
Wondering if you qualify for any of these options? Book a free consultation to find out and ask questions.