Student Loan Forgiveness Qualifications
Under the new federal student loan forgiveness program, qualified taxpayers could be eligible for up to $10,000 in Federal student debt relief (or $20,000 if they received a Federal Pell Grant) on Federal student loan balances owed prior to June 30, 2022. Private student loans do not qualify for forgiveness. To be eligible for debt relief taxpayers must have had an Adjusted Gross Income in 2020 or 2021 of less than $125,000, for taxpayers filing as Single or Married filing separately, and under $250,000 for all other filers.
However, recently enrolled dependent students may be subject to income limits based on one or both parents’ incomes. Taxpayers classified as a recently enrolled dependent students are those that were enrolled in the undergraduate study between July 1, 2021, and June 30, 2022, were born after January 1, 1998, and aren’t married. Taxpayers falling under any of these parameters are advised to file like normal and if identified by the department of education as a dependent student, you will be emailed with further instructions.
For more information and to apply for loan forgiveness visit Studentaid.gov and fill out the application prior to December 31, 2023. To complete the application, you will need the following information: legal name, Social Security Number, date of birth, phone number, and email address, and you must certify that you meet the eligibility requirements.
Federally, the forgiveness will be tax-free, and those taxpayers residing in New Jersey or Pennsylvania will also pay no state tax. However, some states may require the forgiveness received to be included in your income, so make sure to check with your state of residence.