The U.S. Department of Education announced on August 24, 2022, a final extension of the pause on student loan repayment, interest and collections through December 3️1, 2022.
The Department will provide student debt cancellation to borrowers with loans held by the Department of Education.
Eligible borrowers are those with annual income of either (1) under $125,000 (for individuals) or (2) under $250,000 (for married couples or heads of households).
If an eligible borrower received a Pell Grant in college, then that borrower will be eligible for up to $20,000 in debt cancellation.
If an eligible borrower did not receive a Pell Grant, then that borrower will be eligible for up to $10,000 in debt cancellation.
Further details will be released in the coming weeks on how borrowers can claim this relief. The application will be available no later than when the pause on federal student loan repayments terminates after December 31, 2022.
This is an unprecedented event which will certainly have an impact allowing many families additional financial breathing room. And with alleviation of some, or all, of the burden of student debt, now may be the perfect time to contact a member of our experienced Tax Team to discuss your family's needs and to start putting a custom planning strategy in place today for your family’s future.