Millions of Californians have student loan debt. Here’s who qualifies for Biden’s relief plan
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Student debt relief for Californians
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President Joe Biden announced a student loan forgiveness plan Wednesday targeted at low to middle-income borrowers of all ages.
His plan, which is in three parts, includes the cancellation of at least $10,000 in student loan debt for most borrowers.
The student loan payment freeze will also be extended through Dec. 31 to allow for a “smooth transition and prevent unnecessary defaults,” Biden’s administration wrote in a statement. Those who borrowed for undergraduate schooling will need to “pay no more than 5% of their discretionary income monthly.”
“In keeping with my campaign promise, my administration is announcing a plan to give working and middle class families breathing room as they prepare to resume federal student loan payments in January 2023,” Biden said on Twitter.
There are roughly 4 million Californians who owe money on student loans, according to the state. Collectively, they have about $147 billion in debt — with an average of $38,530, a 2021 report states.
The Bee consulted the administration’s website to answer questions of who qualifies for student loan relief and how to make sure that those who qualify get the benefits of the loan forgiveness plan. Here’s what we found:
Do I qualify for Biden’s student loan relief?
To be eligible, borrowers must make less than $125,000 a year or $250,000 if they’re a married couple.
Pell Grant-recipients will receive up to $20,000 in student debt forgiveness from loans held by the Department of Education. Non-Pell Grant borrowers are entitled to up to $10,000 in loan forgiveness.
You will not receive more than your total amount of debt owed, as it is capped at “your outstanding debt.” For example, if you have $8,000 left to pay that’s how much relief you would receive.
How do I get the relief?
Eligible borrowers will be asked to complete an application processed by the Department of Education to get Biden’s student loan forgiveness. The relief will not be treated as federal taxable income, according to the Biden administration’s statement.
No other steps have been announced, but borrowers should expect to hear more information in the coming weeks.
Do you qualify for more?
About 1 million Californians working in “public service” are eligible for additional student loan forgiveness and have until Oct. 31 to apply for the federal debt relief.
According to Federal Student Aid website, qualifying jobs have more to do with who you work for rather than what you do.
Qualifying employers include not-for-profit agencies or government organizations operating on any level, whether state, federal, local or tribal. Working in any capacity for the U.S. military also meets eligibility requirements.
Federal student loans may be canceled after working in public service for at least 10 years.
This story was originally published August 24, 2022 at 1:22 PM with the headline "Millions of Californians have student loan debt. Here’s who qualifies for Biden’s relief plan."
