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WORCESTER, Mass. – Worcester financial planner Richard Carr said President Biden’s proposed student loan forgiveness plan could have significant impacts for students who just graduated.
It will cancel up to $10,000 of debt for borrowers who earn less than $125,000 a year or families earning less than $250,000. Students who received Pell Grants will see up $20,000 in loan forgiveness.
Carr said he’s hopeful students will use this as an opportunity to pursue other financial goals, like buying a car, or house, or putting money towards retirement.
“Once the forgiveness is applied, students are encouraged to check their credit score,” said Carr. “They can do that annual for free to make sure the amount of debt has been adjusted on credit report and there aren’t any other late payments or aspects that need to be corrected. If the student can accumulate those dollars and use them towards other financial goals I think that’s wonderful. During this period until January those payments aren’t required so those dollars can be used in other ways.”
Carr said they’re still waiting for direction from the government on what students will need to do to receive the money. Carr expects 45 percent of student debt to be wiped out with this forgiveness.
Meanwhile, President Biden is extending the student loan repayment pause for a final time through December 31.
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