AUGUSTA, Ga. (WRDW/WAGT) – We’re getting more information on President Biden’s student loan relief plan.
If you have federal loans, you need to make sure the Department of Education has your income information so they can apply the forgiveness to your account.
“This is going to help people achieve their personal goals just a little bit sooner,” said Finance Lecturer at Augusta University, Wendy Habegger.
We’ve learned President Biden’s plan is tax-exempt, which means you don’t have to claim the $10,000 or $20,000 credit as income which will save people a lot of money.
A finance professor says this isn’t going to impact our economy as much as people think.
“I know a lot of people are concerned about the inflationary issue. I don’t think it’s going to have much of an impact only because I know when I get to keep my monthly payment and not have to pay it in, I’m not going to be able to rock the world with the weather with it you know you’re going shopping,” said Habegger.
She had plenty of discussions with her classes about the student debt plan, making sure they understood how this plan will work.
“So, I try to explain to them that the fact that they don’t need student loans is a tremendous blessing that they’re already ahead of the game because they don’t need the loan,” she said. “Most of the individuals who need the loans come from families whose annual salary is 60,000 or less and that’s the only way they’re going to go to colleges with the loans.”
Even though the plan gives relief, some people still have debt to pay.
“For some of them, they will be completely debt free afterward. The majority is still not going to be debt free,” said Habegger.
She sees this debt forgiveness as a one-time thing and says there is more to be done to help education costs.
“There needs to be some adjustments made so that we don’t need to do this again,” she said.
She says many who qualify for the plan, you can enjoy life a little better.
“Instead of you having to pay an extra year it might cut your pay time down,” said Habegger. “What this is going to do is give you money to start doing some of the other things that you have put off.”
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