Hello neighbors.
As we near the end of the first semester of this school year, many Californians and Americans are struggling to balance the exorbitant cost of their tuition with other expenses, and I understand how stressful paying off your loans in a timely manner can be.
That is why I am pleased to inform you that President Biden announced the Federal Student Debt Relief program in August, a one-time debt relief program that will cancel some student debt for low and middle-income borrowers with loan balances before June 30, 2022. Unfortunately, a temporary injunction has been issued while a legal issue is reviewed, but the U.S. Department of Education is encouraging eligible applicants to apply to be ready as soon as the injunction issue is resolved.
Eligible borrowers can receive a full or partial discharge of loans up to $20,000 if they are Federal Pell Grant recipients and up to $10,000 if they are not. Individuals are eligible if they made less than $125,000 in 2021 or 2020, and families are eligible if they made less than $250,000 in 2021 or 2020. Please keep in mind that if you filed federal taxes, your income requirements are based on your adjusted gross income, which can be found on line 11 of the IRS Form 1040.
It is worth mentioning that the California Legislature is aware that the Federal Student Debt Relief may be considered taxable income for state purposes. However, the leaders of both houses of the Legislature issued a statement in…
