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Do I Get Student Loan Forgiveness if I’m Still in School?

·2 min read
jacoblund / Getty Images/iStockphoto
jacoblund / Getty Images/iStockphoto

The federal student loan relief plan announced on Aug. 24 by the Biden administration doesn’t just apply to former students with college loan debt. Loan forgiveness may also become available to students who are still in school.

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A White House fact sheet accompanying the announcement indicated that current students with loans “are eligible for this debt relief.” It added that borrowers who are dependent students “will be eligible for relief based on parental income, rather than their own income.” Eligibility for independent students using their own income to pay for college will be based on that income, Fortune reported.

Income is a critical piece of the equation because eligibility for loan forgiveness is restricted to borrowers in a certain earnings bracket. As the fact sheet noted, the Department of Education will provide up to $20,000 in debt cancellation to Pell Grant recipients with loans held by the Department of Education, and up to $10,000 in debt cancellation to non-Pell Grant recipients.

“Borrowers are eligible for this relief if their individual [yearly] income is less than $125,000 ($250,000 for married couples),” the fact sheet outlined. “No high-income individual or high-income household — in the top 5% of incomes — will benefit from this action.”

The Biden administration also extended the pause on federal student loan repayments through Dec. 31, 2022. The pause includes both former students and students currently in school. Borrowers should expect to resume payment in Jan. 2023, with no further extensions expected beyond the end of 2022.

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Many details remain fuzzy in the days following the announcement — including what happens when current students can no longer be claimed as dependents by their parents. Similarly, no guidance has yet been issued on prospective students who have not yet enrolled in school, Fortune noted. People in this group are advised to wait for more details to emerge.

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This article originally appeared on GOBankingRates.com: Do I Get Student Loan Forgiveness if I’m Still in School?