(WGGB/WSHM) – The Federal Student Loan Forgiveness website has officially launched. The program could relieve up to 40 million borrowers. Now, several legal challenges have been filed against the Biden administration’s policy of putting the program on hold, leaving borrowers in limbo.
“I think that’s fantastic, I think especially with post-COVID, a lot of families are struggling and I think that would be a huge help for everyone in the community,” said Kaie Bolger, a student from first year at American International College.
Students in Western Massachusetts recently shared their thoughts on President Joe Biden’s student loan forgiveness program.
“It would be a big advantage for everyone. I think it would be just stellar, everyone would be so happy about it,” added American International College freshman Thomas Gallagher.
Applications officially opened to borrowers on October 14 for this long-awaited relief. However, more than a week later, the program and any possible debt forgiveness have been put on hold as a federal appeals court temporarily blocked Biden’s student loan forgiveness plan, which will affect 40 million borrowers. Dr. Marcus Davis, dean of the College of Arts and Sciences of Western New England, told Western Mass News that this program also faces other legal challenges.
“It’s a very complex situation with these lawsuits. Some of these lawsuits are based on what might be the fairness of tax liabilities from state to state. Some states are saying they’re going to tax those loan forgiveness rewards,” Davis noted.
Dr. Davis also acknowledged that the new program is an evolving situation that borrowers should be aware of.
“It would be very important for borrowers to know exactly what kind of loans they had and where they are because it’s a changing landscape,” Davis said.
He also shared one of the Department for Education’s changes to private lending, affecting almost 700,000 borrowers. This change in program eligibility was announced on September 29, which excludes federal student loans guaranteed by the government but held by private lenders.
“Forms of debt that we thought were originally eligible in particular… These are loans that were private loans, but were held through federal recognition, through a private bank, they are no longer eligible unless they were consolidated before September 29,” Davis said.
If the program goes into effect, here’s a breakdown of how it would work and who exactly would qualify. You can get up to $10,000 off if your student loan is held by the Department of Education and you earn less than $125,000 individually or $250,000 for a family. If you have received Pell grants, which are reserved for undergraduate students with the greatest financial need, you are eligible for a discount of up to $20,000. The Department of Education is still receiving applications for the program on studentaid.gov.
With respect to students entering college or graduate school, Springfield Public Schools would like to remind students that there are changes to the Application for Federal Student Aid – FAFSA – for college or graduate school. This year.
“Every year for about five years they used to require students to only share their current tax return. Now they don’t do that anymore. They ask students to do it two years before, so at the moment we want the document that students and families have to file to be the tax returns for 2021 and the W-2s for 2021,” said Rose Boulay, administrator of the Springfield Promise program.
There is more good news for those applying for financial assistance. Boulay said the FAFSA form gets shorter every year. She told us how she helps Springfield students understand the application form.
“We have five financial aid officers who are in schools, all high schools, who work with students every day… They may also meet with them just to go over the FAFSA application process and do the FAFSA herself. We are working with students to review the student aid report, just so they can see what the federal government is giving them,” Boulay added.
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