Tiffany's Take: Student Loan Forgiveness | Ep. 139

• Tiffany outlines the three-part plan: final payment pause extension, targeted debt relief for low/middle-income borrowers, and making the repayment system more manageable for current and future borrowers.

He made an announcement saying what the plan would look like. So there's a few parts to the plan.

• The payment pause is extended through December 31, 2022 - the final extension. Payments resume January 2023 for federal student loan borrowers regardless of forgiveness eligibility.

• Borrowers should contact their specific loan servicer as individual circumstances may affect when payments actually begin.

• Pell Grant recipients with loans held by the Department of Education get up to $20,000 cancellation. Non-Pell recipients get up to $10,000. Forgiveness is capped at your actual remaining balance.

• Income limits: $125,000 for single filers, $250,000 for married couples filing jointly.

• Nonprofit, military, and government employees may qualify for complete loan forgiveness through expanded PSLF eligibility. Temporary changes expire October 31, 2022.

• Apply through your loan servicer or visit PSLF.gov for more information.

• 8 million borrowers will receive automatic relief based on existing income data. Everyone else should apply when the simple application launches in early October.

They are advising that people apply before November 15th in order to receive relief before the payment pause expires on December 31st.

• Monthly payments reduced from 10% to 5% of discretionary income for undergraduate loans. Loan balances forgiven after 10 years (instead of 20) for balances of $12,000 or less.

• Unpaid monthly interest will be covered - loan balances won't grow even if payments are $0 due to low income.

• Borrowers who made payments during the pause (March 2020 onward) will be automatically refunded if they have outstanding balances with the same servicer.

• If you paid off your loan or refinanced, contact your previous servicer to request refunds. FFEL loans are not eligible for refunds.

• Seven states may tax forgiveness as income: Arkansas (2-4.9%), California (1-12.3%), Indiana (3.23% flat plus county tax), Minnesota (5.35-9.85%), Mississippi, North Carolina (4.99% flat), and Wisconsin (3.54-5.3%).

I feel like we should all be prepared just in case because you know how it is sometimes y'all where one government will do something. Then they're like, oh, they got a lot of money from that. Let's see if we can do it.