Student Loan Relief /Forgiveness for borrowers
Recent Announcements: According to the U.S. Department of Education, an easy federal student loan forgiveness application will be available by early October. Borrowers must complete that application way before Nov 15, 2022 to receive relief before the latest payment pause extension ends on Dec. 31.
Last week, President Biden presented a plan to cancel up to $20,000 in federal student loan debt per borrower. In order to get maximum, individuals must earn less than $125,000 a year, or less than $250,000 a year for couples, and must have received a Pell Grant in college. If you’ve never received a pell grant, you only qualify for $10,000 of forgiveness. Note: This forgiveness does not apply to private loans.
Even if you’ve made payments during the pause, you can receive refunds and have your loans forgiven as well. Keep in mind, the Loan pause will be lifted after Dec 31,2022. Expect to start making payments on your loans again on Jan 2023.
Benefits of Loan Forgiveness and your Credit
*Reduce your debt to income ratio
*Less Debt Balance can increase your credit Score
*Less debt can put you in a better position for homeownership
*Can help you pay off your student loans off earlier
*You can get back on track with your credit journey
Word of Caution
Do not get comfortable with loan forgiveness. Always stay in contact with your loan provider. Find out which payment plan is the best option. Always pay on time. Neglecting your obligations could set you back to where you started. Be responsible.
Credit Karma: Deceptive Practices
The FTC just announced a $3 million settlement with Credit Karma for “allegedly” preying and luring consumers in with deceptive promises of being “pre-approved” for financial products, including major credit cards. I was a victim as well. Although my credit score was fair, I would apply and always get denied. The only thing I’d receive is a score drop and inquiries. FTC wants Credit Karma to pay , stop being deceptive and preserve records. Under the proposed order, the FTC will return $3 million to consumers who were victims by Credit Karma’s deceptive claims. To find out how to be apart of the settlement, check on the FTC website often.
