Student Loan Forgiveness: Everything You Wanted to Know

Student loan forgiveness was announced a few weeks ago by the Biden administration. What are the pros and cons? Are you eligible? How does it work? Shanna Tingom from Heritage Financial Strategies is here to answer those questions today.

Shanna and Jon agree this plan is a good step in the right direction to help many Americans get back on their feet financially, so they'll have more money they can spend, and get out from crippling student loan debt. The plan doesn't address the root problem here - the skyrocketing cost of higher education - but that's a conversation for another podcast. Also, financial education is so critically important - both of our cohosts made the mistake of signing up for a credit card in college in exchange for a free T-shirt. But Shanna also got pizza out of the deal. Jon did not.

This new plan will provide $10,000 of student loan forgiveness for those who qualify, and that number goes up to $20,000 if you received a need-based Pell Grant. In other words, if your family was below a certain income threshold when you were a student, there's more opportunity here for you. In addition, the "pause" on student loan repayments we've seen throughout COVID will be extended one more time, with an end date of December 31, 2022.

Finally, if you made payments during this period since March of 2020, you may be eligible for a refund.

While some of aspects of Public Service Loan Forgiveness, or PSLF, may go into effect automatically, the best advice is to do your research. Check in with your loan servicer online. Shanna even went to StudentAid.Gov to re-activate her account to look up the most updated information. And, depending on which state you live in, you may be required to pay taxes on the forgiven about. There are many moving parts here, and every situation is different. So do you research, and talk to a professional.

To reach Shanna and her team at Heritage Financial Strategies, visit them online at https://www.heritagefinancialaz.com/