The new stimulus bill doesn't cancel student debt, but you still have a few more months before you have to pay. The American Rescue Plan didn't include plans for student loan forgiveness. ... But, federal borrowers still don't have to make payments through September 30, 2021.
Effectively, from March 2020 to September 30, 2021, student loan borrowers will have zero interest added to their federal student loans for 19 months. Consider this future student loan forgiveness (from the student loan interest you won't be paying) rather than current student loan forgiveness.
The next popular question is, "Can my stimulus check be garnished for unpaid debts?" The answer to this is yes AND no. The new checks cannot be garnished to pay back taxes, child support, or outstanding student loans.
Public Service Loan Forgiveness
PSLF forgives the remaining balance on your Direct Loans after you have made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer.
Student loan forgiveness won't trigger tax bills for borrowers anymore. ... Advocates and borrowers hope the change will clear the way for President Joe Biden to cancel the debt.
The forgiveness provision lasts until Dec. 25, 2025. However, as president, Biden has yet to formally forgive additional student loan debt.
Will your tax refund be garnished? You must have federal student loans in default to have your tax refund garnished. Federal student loans enter default after 270 days of past-due payments. Private student loans in default aren't eligible for tax refund garnishment.
With the third check, if you're past due on child support, you can still receive your full stimulus payment. ... This holds true for any past-due federal or state debts: Your third payment is not subject to reduction or offset. However, private debt collectors may be able to redirect your payment to cover a debt.
Child Support Won't Be Taken From Third Stimulus Checks
If you were behind on child support payments when first-round stimulus checks were being sent, the IRS could have taken your stimulus money and given it to the person you owed.
Yet No Comments