Smeared debt leaves streaks
I hope you're sitting down for this one because you might know some, but not all of the details. Whether you support the idea or were holding your breathe at the thought of your student debt being paid off, it's here. My opinion on the topic doesn't matter. Here are some of the details we think you should know. If the forgiveness doesn't have an impact on your own debt, it may impact a friend, child or family member.
First off, this will impact everyone. It might not pay off debt you don't have, but the money will come from somewhere and we're all chipping in on this one. Again, money can't be placed into the system without consequence. This is more of the same government injection of capital into the hands of millions of American's.
President Biden made an announcement on August 24th that many have been waiting to hear. It's the student loan forgiveness announcement of course. Is it everything you hoped and dreamed it would be? Rack up hundred's of thousands of student debt and sit back and relax while the government make's it disappear like a David Copperfield illusion from the 90's. I can remember crowding the television in anticipation of the big shows he would release. For some, they were doing something similar with their hands glued to their keyboards scouring the internet for information or details on any type of debt forgiveness updates.
Millions of Americans are impacted directly by this announcement. For those with student debt, the devil is in the details on whether they qualify for the program and how much of your student loans will be forgiven.
Some program details we know at the time of this blog release:
How Much? - $10,000 of debt relief per federal student loan borrower for those who did not receive Pell Grants, and $20,000 for those who attended college on Pell Grants.
Who are we talking about? - Applies to individuals making under $125,000 per year; $250,000 per year if married filing jointly. You're probably wondering which year they'll use to base this off of, but that has yet to be determined at this point. Time will tell.
Press the "Pause" button - The President also extended the pause on student loan repayments. Those were set to expire at the end of August this year, but are now being extended until the new year.
Program specifics, details on how to apply for forgiveness and how to proceed would be best found by visiting the Department of Education’s website to learn more about the program.
For more on the discussion of the program, tune in to our latest PennyWise Financial Podcast. You'll hear more details about the plan, some stats on much money this will cost American's and who needs the help and who doesn't. Click the link below to hear it.
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