White House limits student loan forgiveness one day before FAFSA opens

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

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

For those still in school applying for the FAFSA tomorrow, not knowing if they will be pardoned leaves their finances hanging in the air.

“If I can make amends, it will be one less thing I have to worry about when I get out,” said Lindsey Edwards, a student at Cameron University.

Despite the change, the Cameron University Financial Aid Office is still urging people to apply as soon as possible.

“Anyone who thinks they might be in school on August 23 should go ahead and fill out the FAFSA and put their application online for any grant funding we miss,” Caryn Pacheco, director of the financial assistance from Cameron University.

This FAFSA application qualifies students for financial aid for Fall 2023 and Spring 2024.

It is separate from the loan cancellation request.

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

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

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

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

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

“Loan forgiveness is a unique thing. So that’s something that students shouldn’t rely on going forward,” Pacheco said.

Applicants should remember that the Free Application for Federal Student Aid is free.

Only a scam will ask for payment.

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

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