New York State Residents Can Now Apply For Student Loan Forgiveness
New Yorkers can now apply for student loan forgiveness. In August, President Joe Biden announced that certain student loan borrowers could have some of their outstanding loans forgiven. While Republicans are trying to fight the forgiveness program and make borrowers fully responsible for their debt, the application has been made available. The application portal opened on Saturday, October 15, 2022.
According to the United States Department of Education, the average undergraduate student with loans owes nearly $25,000 in debt. Then, if you add in advanced degrees, private colleges, or out-of-state schools, that amount can skyrocket. The Department also estimates that almost one-third of borrowers have debt, but no degree. Many were unable to finish school due to the rising costs. Student loan debt also affects elderly and African-American borrowers,
About 16% of borrowers are in default – including nearly a third of senior citizens with student debt – which can result in the government garnishing a borrower’s wages or lowering a borrower’s credit score. The student debt burden also falls disproportionately on Black borrowers.
Republicans Are Trying To Block People From Getting Student Loan Forgiveness
Seven Republican-led states have joined forces to try to overturn President Biden’s plan to forgive student loan debt. White House spokesman Abdullah Hasan told the Washington Post,
Republican officials from these states are standing with special interests, and fighting to stop relief for borrowers buried under mountains of debt. The President and his administration are lawfully giving working and middle-class families breathing room as they recover from the pandemic and prepare to resume loan payments in January.
Who Is Eligible For Student Loan Forgiveness?
- Pell Grant recipients with loans held by the Department of Education can receive up to $20,000 in debt forgiveness.
- Non-Pell Grant recipients can receive up to $10,000 in debt cancellation.
- Borrowers must have an individual income of less than $125,000 in 2021 or 2020 ($250,000 for married couples).
- Loans that fall under the Federal Perkins Loan Program and loans held by private banks may not be eligible.
Will New Yorkers Who Receive Student Loan Forgiveness Have To Pay State Taxes On It?
The state Department of Taxation and Finance told the Gothamist that it does not plan to tax the beneficiaries of Biden's plan. If, however, the state legislature decides to create a law saying the money forgiven should be taxed, then it will.
You must apply by Dec. 31, 2023. You can apply here now.