Biden extends freeze on student loan payments: When will they resume?

President Joe Biden extended the pause on student loan payments for the last time on Wednesday and said payments would resume in January 2023.

The Biden-Harris administration also introduced up to $20,000 in student loan debt forgiveness for Pell Grant recipients and up to $10,000 for non-recipients. To qualify, borrowers must earn less than $125,000 per year, or $250,000 for a household.

Up to 43 million borrowers will receive relief under the plan and about 20 million will have their student loan debt forgiven entirely, USA Today reports.

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So what does this mean for your student loan debt? Here’s what you need to know.

When will student loan repayments resume?

According to the US Department of Education, the pause in federal student loan repayments ends on December 31. Payments will resume the next day, January 1, 2023.

Do I need to do anything to extend the pause on my student loan?

No, says the Department of Education website. The extended break will automatically apply to your student loans.

How do I know if I qualify for student loan debt forgiveness?

Student borrowers with an individual annual income of less than $125,000, or $250,000 for a household, are eligible for student loan debt forgiveness.

If you received a Pell Grant in college and meet the annual income requirements, the Department of Education will provide up to $20,000 in debt forgiveness for your federal loans. Those who did not receive a Pell grant in college but meet the income threshold can get up to $10,000 in debt forgiveness.

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What do I need to do to get loan forgiveness?

You may automatically qualify for loan forgiveness if you meet the income threshold and the Department of Education knows your annual income. If the department does not have your income data, or if you are unsure if they have your income data, you can apply for loan forgiveness.

The application will be launched in the coming weeks and will be available before December 31. If you want to be notified when the app is open, sign up on the Department of Education’s subscription page.

What is a Pell Grant?

Federal Pell Grants are usually awarded to undergraduate students with exceptional financial need. They do not have to be reimbursed, except in certain situations. The amount of money a person can receive changes from year to year and depends on various factors.

The maximum Federal Pell Grant for the 2022-23 year is $6,895.

Learn more here.

How do I apply for a Pell Grant?

You can apply for Pell Grants and other financial aid programs by completing the Free Application for Federal Student Aid online.

What is the Civil Service Loan Cancellation Program?

If you have worked in public service, such as government, military, or non-profit organizations, for at least 10 years, you may be eligible for full student debt forgiveness through the cancellation of public service loans. Temporary changes to the program, which end October 31, currently make receiving a pardon easier and more flexible.

Learn more here.

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