Student loan forgiveness: Answers to your big questions
MINNEAPOLIS – Billions of dollars in student debt, gone. That big news for borrowers is creating a frenzy for more information.
Wednesday, the White House said it will forgive $10,000 in federal student loan debt for most borrowers, and up to $20,000 if they received Pell Grants. After the announcement, the government's student loan site crashed from all the traffic and it's still tough to get on it tonight.
A lot of borrowers are trying to figure out if they qualify. Here are the basic qualifications:
If you make less than $125,000 and have federal student debt you qualify. It's $250,000 or less for married couples and heads of households.
This debt cancellation only applies to federal loans.
Federal student loan payments have an extended pause until the end of the year.
Students who are dependents will use their parents income for eligibility.
Loan forgiveness won't be treated as taxable income.
Up to eight million people may automatically get it because the government has your income data. If not, there will be a simple application that may not be ready until the end of the year.
The loan forgiveness caps at your outstanding debt amount. So if you're eligible for $10,000 in relief but only owe $8,000, you'd receive enough aid to cancel the debt – but not the extra $2,000 on top of it.
If you still have questions, it's a good idea to reach out to your loan servicer directly.
MORE: Minnesotans weigh in on student loan forgiveness plan cancelling up to $20,000 for millions