Student loan forgiveness: Do parents, spouses, graduate students qualify?
The White House is providing more information on the types of loans that will be covered under the new plan dismissing up to $20,000 in student loans for some borrowers.
Under the plan, Pell Grant recipients are eligible to receive up to $20,000 in loan dismissal while other federal borrowers are eligible for up to $10,000 in forgiveness. Private loan holders are not eligible.
There are income limits for loan forgiveness - $125,000 for individuals or $250,000 for married couples. Forgiveness applies only to loans taken before July 2022.
Parents, spouses qualify
Earlier this month, the Education Department clarified some of the borrowers that were eligible for relief. The list includes parents who have student debt for their children and borrowers with loans from graduate school.
“All @usedgov-held loans are eligible,” Education Secretary Miguel Cardona said in a tweet, listing undergraduate, graduate, and spousal loans as well as Parent PLUS and Grad Plus loans.
According to Business Insider, parents and graduates can take out a type of debt called PLUS loans, which allow a borrower to cover up to the full cost of attendance for a program rather than a loan based on income. Those loans typically have the highest interest rates and can be especially restrictive for parents.
As many as 3.7 million families hold $104 billion in parent PLUS loans.
More information on how to apply for loan forgiveness – including an application – is expected in October. Once that’s complete, borrower can expect to see the loan adjustment in 4-6 weeks, before the scheduled payment restart of Dec. 31st. Loan payments have been on hold since March 2020, the start of the COVID-19 pandemic.