On Your Side: Q & A Student loan forgiveness
SPRINGFIELD, Mo. (KY3) -Since President Joe Biden announced student loan relief this week, many sent questions to On Your Side.
If you make less than $125,000 a year, you’ll get up to $10,000 forgiven. A Pell grant doubles your forgiveness to $20,000. It only applies to federal loans, not private.
Many ask if you’ll have to pay taxes.
“We don’t know yet if this will impact taxes,” said Becky Ahrens with Drury University. “We don’t think it will impact federal taxes. It’s possible it could impact state taxes, but there’s really no firm answer on that.”
This will likely change your monthly payment amount. For current students, that forgiveness is not prorated.
“We’ve had a lot of questions from students asking if they could take out a loan now and have that forgiven. The answer to that is no. Loans had to be dispersed before July 1st,” said Ahrens.
“Know who your lenders are. Know how much you have in loan balance right now before the forgiveness is processed, and monitor that. There may be some sort of application you need to fill out,” said Ahrens.
Viewers tell On Your Side those student loan phone scams are back. Crooks call and say they can help you pay down your loans. Don’t take the bait. They want your bank info.
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