On Wednesday, August 24, United States President Joe Biden announced a student debt relief plan that will include forgiving between $10,000 and $20,000.
The University of Wyoming Financial Aid Office responded with the following statement when asked how this might affect current students and alumni.
With the announcement of the debt relief plan, we will be looking to the Department of Education for further guidance and strongly recommend that all federal borrowers who believe they may be eligible visit: https://studentaid.gov /debt-relief-announcement/. Here you will find an option to register on the Ministry of Education’s subscription page, to be notified when the process is officially open. We will continue to assess and estimate the impact for our students, where possible.
For loan holders to be eligible for a rebate of up to $10,000, a person must earn less than $125,000 or less than $250,000 for married couples and households.
It is noted in the White House “FACT SHEET” released on the new debt relief plan that if an individual borrower is dependent, their eligibility status will be based on parental income rather than their own. .
Another eligibility adjustment is if a person was a Pell Grant recipient, in which they are eligible for a rebate of up to $20,000.
Although the eligibility criteria are based on income, they are also limited to a specified period of time.
The Institute of Student Loan Advisors has emphasized that loans that have not been disbursed by June 30, 2022 will not be eligible for loan forgiveness.
According to the UW Fact Book 2022, approximately 57% of undergraduates leave with $0 in student loan debt, the other half of students leave with an average of $23,592.
Information from the Education Data Initiative shows that the state of Wyoming has an average of 7,545 Pell Grant recipients, or an average of $3,908 per student.
This data, along with all relevant income data collected by the US Department of Education, will assist in the automatic cancellation of approximately eight million borrowers nationwide.
“We estimate that 75% of them will take advantage of the help offered to them. And if that debt is canceled, that means you know, if they were to make payments of $400 a year for the next 10 years, that cash flow will no longer come into the government,” Bharat Ramamurti, director of the National Economic Council of the United States, said Wednesday in a press release.
People who may not have submitted their income information to the U.S. Department of Education will have the opportunity to do so when the application becomes available in October.
The Biden administration also extended the pause on federal loan repayments through Dec. 31, 2022.
“If we restore the loans without making any – no other changes, basically – because things have changed in the world in the last two years – basically we would expect to collect about $ 4 billion a month more of what we’re collecting right now. Right? So roughly speaking, $48 billion coming into the government that would not have been received before,” Ramamurti said.