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Thousands of Arizonans Benefit from Student Loan Fixes
More than 20,000 Arizonans who have been paying off student loans for years are now eligible for automatic student-loan relief under recent adjustments made by the Biden administration. Some borrowers are already beginning to see the benefits of this program.
Significant Debt Relief for Eligible Borrowers
The amount of potential relief for the 20,530 eligible Arizona borrowers totals $1.03 billion, with an average of nearly $50,200 per person, including interest. Arizona ranks 11th in the number of eligible borrowers and 12th in total estimated debt relief. Texas leads in both categories, followed closely by California and Florida.
Correcting Reporting Errors in Income-Driven Repayment Plans
The fixes announced by the Biden administration apply to Income-Driven Repayment plans to ensure that borrowers are credited with the correct number of monthly payments towards forgiveness. The Department of Education has started notifying the 804,000 borrowers nationwide that their debts will be discharged automatically in the coming weeks. This forgiveness program is already well underway.
- Borrowers are eligible for loan forgiveness if they have accumulated either 20 or 25 years of qualifying monthly payments, depending on their loan type and Income-Driven Repayment plan.
- The recent fixes correct various issues such as payments for certain months that weren’t previously credited if borrowers were in ineligible plans.
Loan Discharges Now Being Processed
Qualified borrowers are receiving or will receive loan forgiveness without any required action on their part. The U.S. Department of Education will continue to identify and notify borrowers who reach the applicable forgiveness thresholds of 240 or 300 qualifying monthly payments, depending on the repayment plan and loan type.
Discharges have begun or will begin 30 days after borrowers receive emails from the Department of Education. No loan payments are due during the forgiveness process. Borrowers will be notified when their debts have been discharged. By next year, the department expects to have updated payment counts for all borrowers not yet eligible for forgiveness.
Tax Waiver and Eligibility Assistance
Federal taxes on the forgiven student loans will be waived through 2025. Borrowers with questions about eligibility should contact their loan-servicing company or seek information from TISLA, the Institute of Student Loan Advisors, which provides free assistance.
Supreme Court Blocks Proposal for Student Loan Relief
In June, the Supreme Court blocked a proposal to provide one-time student loan relief to around 43 million people, citing the overreach of the White House’s authority to provide such relief.
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