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Biden Announced $10,000 in Student Loan Forgiveness. 4 Money Moves to Make If You Qualify – NextAdvisor

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Life just got better for millions of student loan borrowers.

President Joe Biden announced Wednesday he will cancel $10,000 of student loan debt for borrowers who qualify and extend the federal student loan payment pause until the end of the year. 

To qualify for the $10,000 forgiveness, individual borrowers must earn less than $125,000 a year, or less than $250,000 a year for couples. Biden also said he would forgive up to $20,000 in debt to those who borrowed money under the Pell Grant program for low-income students. The repayment pause was extended for a “final time” until Dec. 31, 2022. 

“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,” the president wrote in a tweet, saying he plans to share more details on his plan Wednesday afternoon.

The action will fulfill a Biden campaign promise from nearly two years ago. Many borrowers had grown anxious, discouraged, and impatient with the president’s inaction in recent months, and some had started to question if any student loan relief would come to fruition. Roughly 43 million Americans owe $1.6 trillion for federal student loans, according to recent federal data. 

The Biden administration “appears to be offering targeted relief to those who need it,” says Robert Farrington, founder of The College Investor, a site that provides information and advice on student loans. “However, I’m concerned about the execution.” The Education Department said borrowers will have until the end of the year to claim forgiveness. 

Details are still coming out on how Biden will enact widespread student debt cancellation and its impact to the U.S. economy. But $10,000 could make a meaningful difference in the lives of many Americans straddled with student loan debt, experts say. 

Here’s what you need to know now, and smart money moves to make if you qualify for student loan forgiveness. 

Money Moves to Make If You Qualify for Student Loan Forgiveness

First, experts recommend that you continue to take advantage of the pause on federal loans through the end of the year. Use this time to prioritize other important aspects of your finances, like building an emergency fund of savings, paying down high-interest debt, or investing in a traditional retirement plan. Those are areas where you can make your money go further right now. 

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Source: https://time.com/nextadvisor/in-the-news/biden-announces-student-loan-forgiveness-plan/

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