Consumer Alert: New stimulus bill forgives student loans. Does yours qualify?
ROCHESTER, N.Y. (WHEC) — In your consumer alert, I’m taking a look at the latest stimulus bill and your student loan debt. Everyone is talking about it. No one is explaining it. So I’ve been researching for you.
President Biden has been boasting about that billion bucks. The stimulus bill forgives $1 billion of student loan debt, but it’s only for folks who were defrauded by one of those bogus for-profit colleges. Those colleges often closed suddenly, went belly-up, never awarded degrees, or awarded degrees that were meaningless. So the government is going to forgive those loans, and under this new bill, the amount of the loan forgiveness will not be counted as income, so you don’t have to pay tax on it. You have to apply for forgiveness. Here’s the link.
So far, only about 7,200 folks have been approved for who collectively owe about a billion bucks. But this is a fraction of America’s student loan debt. Forty-five million folks owe $1.7 trillion in student loans. So let’s do some math, shall we? If you divide Biden’s billion bucks of loan forgiveness by the amount Americans owe, $1.7 trillion, you get .06%. The amount of student loan debt forgiven is less than one percent of the debt Americans owe.
So if you’re one of the millions still paying off those college debts, here are some programs to consider.
- Student loan refinancing. If you refinance that debt at a lower interest rate, you could potentially save thousands over the life of the loan.
- Income-driven repayment plans. In this program, you pay back the loan according to your income. Your payments are capped at 10% of your discretionary income.
- Public service loan forgiveness. You have to be enrolled in that income-driven repayment plan and working for a non-profit or qualifying public service profession.
I’m also keeping an eye on Washington. President Biden has discussed wiping away up to $10,000 of your debt with an executive order. If that happens, you’ll get all the details here on your News10 NBC Consumer Alert.