Biden’s student loan forgiveness and eligibility

COLUMBUS, Miss.  (WCBI ) – As President Biden rolls out student loan forgiveness plans, the question is, who qualifies?

Reactions were swift on social media. While some people are excited about the debt forgiveness plan, others aren’t as thrilled.

But even some of them are eager to find out if they are eligible.

The Biden administration’s plan could benefit over 40 million borrowers, and according to some reports could completely wipe out the student loan debt of around 20 million..

However, this plan only applies to federal student loan borrowers. Nicole Patrick, Director of Financial Aid at Mississippi University for Women, says there are different categories of student loans.

“The federal loans are typically awarded by the FASFA which is the Free Application for Federal Student Aid. The federal loans are the direct subsided loan and the direct unsubsidized loan. There is also a parent loan that parents can take out for their student and its called the Parent Plus loan,” Patrick said.

According to the Federal Student Aid website, individual borrowers who make less than $125,000 yearly will have up to $10,000 of their federal student loan debt forgiven.

This plan may sound like a relief; however this forgiveness plan does not apply to those with some private student loans.

“Anything that is Sally Mae, Regions, Renasant, Discover, or Wells Fargo those types of things. Those are all considered private loans and they are credit based. Unfortunately, they are not looped in on the same site that the federal loans are,” Patrick said.

And what about those student borrowers taking out new loans?

“That it is effective for if you had loans prior to June 30,2022, so if from what I understand any loans current for this academic year would not be included in that.”

Patrick advises borrowers to pack their patience as financial aid offices learn more about the Forgiveness Plan. In the meantime, borrowers can visit the Federal Student Aid website to update contact information.

Categories: Local News