The Biden administration has begun implementing a number of programs and initiatives to ease the burden of student loans and make the repayment process fairer and more manageable. For those who have student loans and want to take advantage of all the benefits coming their way, there are a few key dates you might want to keep in mind in 2023. With the many new initiatives being launched at the same time, it can be overwhelming to keep track of deadlines ahead and where action is needed.
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Here’s a rundown of important dates you’ll want to add to your calendar to make the most of student loan payments and new programs.
31 December 2022
It is important for borrowers to be aware of December 31, 2022. Although this date is technically in 2022, it is still a key date to keep in mind. It is the last day that will be open for applications for debt restructuring for student loans. The Federal Student Loan Debt Relief Program will offer eligible borrowers up to $10,000 in loan forgiveness for non-Pell Grant recipients and up to $20,000 in loan relief for former Federal Grant recipients. Be sure to check the Federal Student Aid website to find out if you are eligible for emergency aid.
While you have until the end of December to apply, the Ministry of Education recommends that you apply no later than November 15 because it will take four to six weeks for the applications to be processed and the money to the borrowers’ accounts.
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1 January 2023
Borrowers are probably dreading January 1, 2023. On the first of the month, student loan payments resume after a long break. In light of this impending payment date, it is important that borrowers submit their applications as soon as possible so they can be processed and their accounts updated before payments resume.
1 May 2023
The new IDR account adjustment begins in November 2022, and some people will see their debt canceled or substantially canceled on or after July 2023. No further action is required for this initiative for those who already have federal student loans. , as this program will happen automatically throughout the autumn. However, borrowers with FFEL and commercial student loans can require direct loan consolidation to benefit from relief. It must happen before
1 May 2023.
For those unfamiliar, this is another student loan relief initiative that Biden announced last spring that will launch Income Driven Repayment (IDR) programs. Under this plan, the Department of Education will be able to offer retroactive credit to someone else’s student loan account relative to the borrower’s repayment period. The department stated that more than 3.6 million borrowers will receive at least three years of payment credit.
“Any borrower with loans that have accumulated a repayment term of at least 20 or 25 years will see automatic forgiveness, even if they do not currently have an IDR plan,” according to the department.
1 July 2023
In addition to the temporary initiatives, the Biden administration is also implementing some new federal student loan rules to provide more permanent changes. These new plans include updating the Public Service Loan Forgiveness (PSLF) rules to codify the PSLF Limited Exemption. The PSLF program allows borrowers to get credit for payments they made toward their loan that would not normally qualify for PSLF.
There is also a discussion about adopting a more affordable IDR plan. In a statement from the Ministry of Education in August, the ministry proposes a new income-based repayment scheme that will lower monthly payments for low- and middle-income borrowers. The new plan will reduce monthly student loan payments by 50%. The proposed new plan would also help protect loans from accumulating interest by lowering interest rates.
Although these rules have not yet been finalized, they could be adopted on July 1, 2023 at the earliest.
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