Why did these people get $ 191 million in student loan cancellation?
After student loan the cancellation is in progress.
Here’s what you need to know.
First, President Joe Biden canceled $ 1 billion in student loans. From now on, 147,000 other people will also benefit from a student loan cancellation. Students who attended the University of Phoenix, one of the nation’s largest for-profit colleges, will receive the following benefits as part of a regulation with the United States Federal Trade Commission (FTC):
- $ 50 million in direct payments to students; and
- $ 141 million in canceled unpaid balances owed to the school.
The payments come from the 2019 settlement between the University of Phoenix and its parent company, Apollo Education Group, with the FTC. This settlement is separate from the billion dollars in student loans that Biden canceled last week.
Student loan cancellation: who is eligible
As part of the $ 191 million settlement, the FTC sends 146,804 checks and issues 677 PayPal.
- You enrolled in a master’s, bachelor’s or associate’s degree program at the University of Phoenix between October 15, 2012 and December 31, 2016;
- You paid more than $ 5,000 in cash, grants, private and federal student loans, or military benefits;
- You have not obtained the cancellation of a student loan as part of this settlement; and
- You have not chosen not to send your details to the FTC through the University of Phoenix.
“It is the largest colony of [FTC] got in a case against a for-profit school, ”said Andrew Smith, director of the FTC’s Office of Consumer Protection, in 2019 when the settlement was announced. “Students making important decisions about their education need the facts, not the fantastic job opportunities that don’t exist.”
The FTC alleged that the University of Phoenix used advertising from 2012 to 2014 to primarily target military and Hispanic consumers. The company’s ads featured employers, including Microsoft
“The FTC made allegations regarding a campaign that ended in 2014 that have not been tested by litigation and do not constitute factual findings by either the FTC or any court,” the University said. of Phoenix in a statement. “The University has not admitted to any wrongdoing and continues to believe that it acted appropriately. This settlement agreement has allowed us to continue to focus on our core mission of improving the lives of our students through higher education relevant to their careers, and to avoid any other student-serving distractions that may have occurred. result from a protracted dispute.
How to cancel your student loans
What are the other ways to get a student loan canceled?
How can you get a student loan canceled? There are several ways to get a student loan canceled. The two most popular federal government programs are public service loan forgiveness and income-tested repayment. The Public Service Loan Discount is available to borrowers who work for a qualified nonprofit or public service employer, make 120 monthly student loan payments, and meet other requirements. If you don’t work for a nonprofit or public service employer, consider an income-based repayment plan.
Income-based repayment: get a lower student loan repayment
If you want a student loan cancellation, and none of the student loan cancellations to date have hit you, one strategy is to sign up for an income-driven repayment plan. The top four income-based reimbursement programs include Income Based Reimbursement (IBR), Pay As You Earn (PAYE), Revised Pay As You Earn (REFUND), and Income Based Reimbursement. (ICR). You may get a lower monthly payment depending on your discretionary income, family size, and state of residence. If you are already enrolled, now is a good time to update your income with your student loans manager. After 20 years (undergraduate student loans) or 25 years (graduate student loans) of monthly payments, you can get the federal student loan canceled from your student loan balance. As part of the new stimulus package, Congress made the student loan forgiveness tax-exempt until December 31, 2025, which means if your student loans are canceled before that date, you won’t owe tax. on the amount of the student loan forgiveness. Congress can extend the deadline or, alternatively, make the forgiveness of tax-exempt student loans permanent.
Will your student loans be canceled?
Congress has a proposal on the table – which asks Biden to overturn up to $ 50,000 of student loan cancellations through executive order. However, as Biden has indicated, he is unlikely to cancel student loans by executive order, Congress has the power to act next. However, there is no official timeline for getting student loan cancellation or a guarantee that your student loans will be canceled. Congress has yet to come up with a bipartisan legislative proposal that Democrats and Republicans can support. Rather than hoping for a one-time student loan cancellation (which may or may not come), make sure you have a student loan game plan in place today so that you have a clear path for loan repayment. student. Here are some potential options to consider to save money: