Student loan forgiveness could be coming as soon as this month.
The Biden administration is considering a number of different ways to move forward with cancelling education debt. The biggest uncertainty is how much of the debt it will relieve, if any. On the campaign trail, President Joe Biden came out in support of $10,000 in cancellation per borrower, but he’s increasingly under pressure from other lawmakers and advocates to go further and wipe out $50,000 for all.
But there’s also the question of who would get the relief.
In recent weeks, there have been hints on which borrowers may be included in the possible jubilee. Here’s what we know so far.
Income caps could apply
It’s been reported by the Washington Post that the White House is considering setting an income cap for the loan forgiveness, likely in part to quell critics who say the policy would direct taxpayer resources to the well-off.
Some of the ideas floated have been cutting off the relief to those who earned over $125,000 or $150,000 as individual filers in the previous year, or $250,000 or $300,000 for couples who file their taxes jointly.
According to an estimate by higher education expert Mark Kantrowitz, more than three quarters of student loan borrowers would still get forgiveness with those rules.
Graduate and Parent Plus loans may be included
There was talk at one point that graduate school student loans could be excluded from cancellation, but in a recent internal agency document Politico obtained, the Education Department’s plan to forgive the debt would include them. (The White House will likely have the final say, though.)
The Education Department, in its plan, anticipates it would also forgive the student loans for parents, known as Parent PLUS loans, and FFEL loans, which are federal loans held by private entities, in addition the main Direct federal student loans.
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Private loans likely will be excluded
There are somewhere around 6 million Americans who hold private student loans, according to Kantrowitz.
Any forgiveness by the government is not likely to impact these loans, as that debt is picked up by private companies and outside the federal student loan system.
How fast forgiveness could come
Borrowers whom the Education Department has income data on could see the cancellation automatically within several months, according to the agency’s plan obtained by Politico. (The department would have that information for borrowers enrolled in income-driven repayment plans.)
Others may have to self-certify their income, which could lead to a longer wait time.