The moment to apply for student loan forgiveness is now. After much anticipation, President Joe Biden announced on Monday that the site to apply for forgiveness is active.
“The amounts of the forgiveness are $10,000. If you didn't receive a Pell Grant, if you did receive a Pell Grant, you're eligible for up to $20,000. And then last qualifier, as it has to be a loan held by the United States Department of Education,” said Todd Mora, program manger of Sanford Center For Financial Planning and Wellness at Western Michigan University.
Mora said the average student loan debt is roughly $40,000, and with the loan forgiveness, “it takes a big chunk away.”
Kalamazoo resident Tamekka Bennett is grateful for the loan forgiveness program. However, she feels like the amount is not a lot compared to her overall debt.
“College is so expensive now that I don't know if it's significant enough of an amount to offset the rising cost. So for me, personally, I will take it, but I'd love to have more, absolutely. But I also know that no matter what, I would have had to pay it all back if I would have gotten anything,” Bennett said.
To limit some of the loan stress, Mora suggests that students should come up with a four year plan. “So you have a good idea of what you are going to spend, what you know your family contribution might be, and then the amount that you have to borrow, so that you plan that out. So it's not a surprise when you get to the end. The second thing is to monitor those living expenses while you're in school.”
He said if you have already graduated and plan on applying for loan forgiveness, avoid accumulating more debt.
“Don’t get your $20,000 forgiveness, and then go out and get a credit card, and/or a car loan or something like that, and then replace it because you'll be back in the same boat, but you'll actually be in a little bit worse position because you will be at a higher debt,” he said.
His last piece of advice was to take this as an opportunity to minimize your debt.
If you’re looking to apply for student loan forgiveness, you can do so at studentaid.gov.
