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Your student loan forgiveness questions answered

If you make under $125,000, borrowers are eligible to receive up to $10,000 in forgiveness.

INDIANAPOLIS — Student loan forgiveness is on a lot of people's minds after last week's announcement from President Joe Biden that some federal student loan borrowers would see forgiveness.

Borrowers who make under $125,000 a year are eligible to receive up to $10,000 in forgiveness. For Pell Grant recipients, it's up to $20,000.

Here are some common questions addressed:

Can I request a refund for payments made after March 2020?

Yes. The Department of Education said you can request a refund for payments made after March 13, 2020.

To do so, contact your loan servicer.

Will I owe taxes on the forgiven debt?

At the Federal level, it's not likely because the American Rescue Plan of 2021 made student loan forgiveness tax-free through 2025.

At the state level, while it's possible, Indiana is not a state flagged by the Tax Foundation as at-risk for debt discharge taxation.

Are Parent PLUS loans eligible for forgiveness? 

Yes, they are according to our sources at NerdWallet.

Sara Rathner with NerdWallet said your notices about forgiveness will look similar to the notices you've received in the past.

"If you ever receive an unusual piece of mail, or an email, or a phone call that seems unsolicited and you're unsure whether or not it's real, you can contact your loan provider, you can contact the Department of Education," Rathner said.

Click here to sign up for alerts about forgiveness from the Department of Education.

    

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