All right, in a new court filing,
the Department of Justice argued the
Biden administration student Loan
Forgiveness program should go forward.
This is all while a challenge
brought by several Republican
LED states still plays out.
Last week, an appeals court temporarily
halted the president's program from
processing those forgiveness applications.
But that doesn't mean there's a
pause on taking those applications.
So if you haven't applied for the
student loan forgiveness program,
you need to do.
That so that you might be able to
even get paid by the end of the year.
Based on the fact that the
Department of Ed has said that
if you apply by November,
the middle of November,
that it will be processed by the
time payments resume in January.
I think that gives us a sense
that they're looking at a round
of 45 day window to process these,
right, so that despite the pause,
officials are encouraging you
to apply now with somebody.
Questions surrounding the loan
forgiveness plan, we're bringing
on our expert Betsy Mayotte from
freestudentloanadvice.org and she's
going to take your text. Questions.
And so this is what happens.
336-379-5775 is the number there so
that you can text in your question.
Now your your question is anonymous,
but you get your question
answered in real time.
All right, let's start with who
qualifies for the debt cancellation.
Great question.
So the short answer is if you have
federal student loans and those loans
have been eligible for the COVID pause,
meaning you haven't been due for
payment since March of 2020 and you've
been enjoying a 0% interest rate,
then your loans are potentially
eligible for this broad debt relief.
OK. And so, um, you've got the 10 to 20,000,
right, are the caps and then you have to
only make a certain amount of money to be
able to have to have this loan forgiveness,
right. So if you're a single
person or you file your taxes
as married filing separately,
the your maximum income for either
2020 or 2021 is an adjusted gross
income of no more than 125,000.
That jumps to 250,000 for married
couples and just to be clear.
You can be over one of those
years and still qualify as long
as your income was under those
caps in either 2020 or 2021,
then you potentially qualify
assuming your loans are eligible.
Yeah. And that is really key.
So 2020 or 2021, you can use your 1099.
So you can look at your IRS form correct on,
I mean your 10:40 and look
and see what your AGI was,
your adjusted gross income,
not what you think you're
taking home every single year.
But actually what you reported to the IRS.
That's exactly right.
You're 1040 is where to go to check
what your adjusted gross income is.
OK. And so you might be pleasantly
surprised that you fall underneath
that cap of 125 or whatever,
so that you are able to take in on this.
All right. So we've got a 10,000,
we've got a possible 20,000 to 20,000
is for those who received a Pell Grant.
What if they're not really sure
if they received a Pell Grant?
So I just, we get a question about
this often. So the first thing I
want to say is it doesn't matter
when you got the Pell Grant,
you could have gotten the
Pell Grant 30 years ago,
but you took your loans out two years ago.
You'd qualify for the 20 grand.
The place to look to see if you
ever did get a Pell Grant is
www.studentaid.gov, which is the
Department of Education's website.
Now there is a PS to that.
If you did get your Pell Grant before 1994,
it's not going to show up to you.
That studentaid.gov. But trust me,
the feds do have that information,
alright? And we're already getting
questions this person's asking.
Can you explain a student loan?
Is this for private loans?
So this is a tough question
to answer in a quick fashion.
If it's a true honest to
goodness private loan,
so say the lender is Wells Fargo or
discover or Sofi or Earnest or Laurel Rd,
then those loans are not
eligible for this debt relief.
Even if it one was used to pay
off a federal student loan,
it's not eligible.
But there's a type of loans called
Federal Family Education Loan
program loans that were there.
Primary federal loan program
back before 2010.
Some people call those private loans
when they are actually federal.
If that loan is being held by
the Department of Education,
then it's eligible.
If it's not,
then it's not,
and you'll know that by
going to studentaid.gov.
You can find that out by going to
studentaid.gov and seeing who the lender is.
But again, the easy way to know if your
loan is eligible for this have have your
payments been paused since March of 2020?
If the answer is yes, the loan is eligible,
that's a good way to do it. All right.
Now Speaking of that pause,
since 2020 there have been some
folks who decided they were going
to still pay on their loans so
that they could kind of keep up.
And what happens if they paid on their
loan and they got underneath that 10
or $20,000 that's now going to be paid.
Or they can get a refund.
Let's talk about that.
Yeah, the refund aspect of this is
really great. So if you paid paid
your loans during the COVID pause,
so any payments made since March of 2020.
And you paid your loan down below the
threshold of what you're eligible for
and forgiveness, but didn't pay it off.
You don't have to do anything
beyond apply for the debt relief.
They will automatically send
you a refund for the difference.
Now, if you got really aggressive
with your loans and paid them
off during the COVID pause,
you do have to call your loan
servicer and ask for the refund
and ask them to reopen the loans.
OK? So you only have to ask
them to reopen the loan to
get your refund if you have.
Totally paid it off,
but you're saying it should be
automatic if you had just paid
it down a few thousand or so.
Yeah. So let me give you an example.
Let's say before the COVID pause started,
you owed $20,000.
During COVID, you paid down 5.
So today you only owe 15,000.
All you have to do is
apply for the debt relief.
If you received a Pell Grant and
are eligible for the 20 grand,
they're going to pay off the 15
you owe and send you a check
from the US Treasury for that
5 grand you paid during COVID.
Oh, really? So that is how
the refund's going to happen.
They're going to send you a check,
just like you would get like an IRS refund.
Right now, in some cases,
it'll go directly to your bank account.
It all depends on whether the treasury
has your bank account information or not.
OK. So there's still a few
things there in flux, right.
We're going to take a quick break.
What we want you to do is continue
to text us your questions, the
336-379-5775, and we'll be right back.