If you’re a Federal Pell Grant recipient, then there’s some great news for you. The U.S. Department of Education will provide up to $20,000 in debt cancellation to Pell Grant recipients with loans held by the Department of Education. They’ll also provide up to $10,000 in debt cancellation to non-Pell Grant recipients.
How do I know if I am eligible for debt cancellation?
Borrowers are eligible for this relief if their individual income is less than $125,000 or $250,000 for households. Eligibility is dependent on your annual income. If your annual income has fallen below $125,000 (for individuals) or $250,000 (for married couples or heads of households), then you can qualify for this grant. If you received a Pell Grant in college and meet the income threshold, you will be eligible for up to $20,000 in debt cancellation. If you did not receive a Pell Grant in college and meet the income threshold, you will be eligible for up to $10,000 in debt cancellation.
What does the “up to” in “up to $20,000” or “up to $10,000” mean?
Your relief is capped at the amount of your outstanding debt. For example: If you are eligible for $20,000 in debt relief, but have a balance of $15,000 remaining, then you will only receive $15,000 in relief.
What do I need to do in order to receive loan forgiveness?
Nearly 8 million borrowers may be eligible to receive relief automatically because relevant income data is already available to the U.S. Department of Education. If the U.S. Department of Education doesn’t have your income data, the Administration will launch a simple application which will be available by early October.
If you have any questions, please contact your local tax professionals at Meadville Tax Service at info@meadvilletaxservice.com or call 814-333-2488.
