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Dear BPA Client, |
Today, the White House announced student loan relief for millions of borrowers. Our team expects it will take months before all of our questions are answered. Below, we included some highlights on what was announced.
Before we share those highlights, please understand that we cannot tell you whether you qualify for forgiveness as there are still too many unanswered questions. If you engage Butrica Ployd for a year end tax projection, we can discuss how this will affect you at that time. However, we do not expect to have concrete answers before projection season starts in October.
Now, onto the highlights:
Forgiveness:
The announcement does promise some forgiveness on current federal loans.
Forgiveness
Up to $20,000 per borrower if you did receive a PELL grant.
However, each state will need to grant tax relief on its own. Otherwise, student loan forgiveness will be taxable for state income taxes.
Federal Student Loan Payments
The payment pause has been extended through December 31, 2022. Payments will resume in January.
Income Based Repayment Plans (IBRP)
The announcement also includes guidelines that increase eligiiblity for IBRP and lowers monthly payments.
To read the full White House press release, click here.
If you have more questions:
You should contact your federal loan servicer.
If your questions relate to your AGI, you can review your 2021 return at www.Onvio.us. Our admin team will not have capacity to answer questions related to your AGI and cannot comment on your eligibility until we receive more guidance.
If you still have questions for your accountant, you should schedule a tax projection.
Best Regards,
Sean M. Godwin
Certified Public Accountant
