This forgiveness is targeted toward borrowers who have been on an income-driven repayment plan for 20 or 25 years. Also, this is separate from the $400B+ student loan forgiveness that was recently struck down by the Supreme Court a few weeks ago.
The Department of Education said that inaccurate payment counts in the past have made it so many borrowers progress toward loan forgiveness have been lost due to administrative errors over the years. The forgiveness will mostly be going toward people who have been paying their student loans for more than two decades and still haven’t eliminated the balance.
What does all this mean for you if you are not one of the people who qualify for this forgiveness? Make sure you make a budget for when payments resume in a couple of months. It’s important to stay in close contact with your student loan servicer and don’t be afraid to ask them a lot of questions until you feel confident you understand all of your payment options and which is best for your situation. The administration is currently working to make changes to the loan payment options, which is another reason to stay in close contact with your servicer and get the latest updates on your options from them.
As always, reminding you to build wealth by following the two PFC rules: 1.) Live below your means and 2.) Invest early and often.
-Vivi & Shane
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