White House limits student loan forgiveness one day before FAFSA opens

LAWTON, Okla. (KSWO) - Just one day before the free application for federal student aid opens, the Biden administration is limiting which loans can be forgiven.

The White House has decided to exclude forgiveness for loans from private lending companies, even if the loan is guaranteed by the government.

For those still in school and applying to FAFSA tomorrow, not knowing if they will have forgiveness leaves their finances up in the air.

“If I can get it forgiven, that will be one less thing I have to worry about when I get out,” Cameron University student Lindsey Edwards.

Despite the change, the financial aid office at Cameron University still urges people to apply as soon as they can.

“Anybody who thinks they might be in school come August of 23, they should go ahead and fill out the FAFSA and get their application in line for any of the grant funding that we run out of,” Cameron University Financial Assistance director Caryn Pacheco.

This FAFSA application qualifies students for financial aid for the fall of 2023 and spring of 2024.

It is separate from the application for loan forgiveness.

“The FAFSA for ‘22-‘23, if you filled that FAFSA out, it used 2020 income. That’s the income they’re going to be using to base the loan forgiveness off of,” Pacheco said.

The application for student debt relief is expected to open in early October.

But a date has yet to be set, leaving people with loans confused.

“Even Good Morning America, when they tried to explain it, I’m like, huh?” Edwards said.

People applying to the FAFSA now should not expect those loans to be forgiven.

“The loan forgiveness is a one time thing. So, that’s something that students should not be counting on for future,” Pacheco said.

Applicants should remember the free application for federal student aid is free.

Only a scam will ask for payment.

“If it asks you to pay money back out of that. Do not pay money to apply for the free application for federal student aid,” Pacheco said.

To qualify for grants, loans and scholarships from the government and some other organizations a completed FAFSA application is required.

Copyright 2022 KSWO. All rights reserved.