Question about Federal Loan Forgiveness

[TennesseeTarheel]

Ever since Biden announced his policy to "forgive" 10k in federal loans and 20k in Pell grants, I have been puzzled (more than usual). I thought grants were gifts and not loans. My understanding was Pell grants didn't have to be paid back unless there was a change of course. So, does this effect only Pell grant recipients who, for one reason or other, failed to complete their degrees in their declared major. Maybe I'm making this more difficult than it needs to be as usual.

 

[Thunder Good-Oil]

Ever since Biden announced his policy to "forgive" 10k in federal loans and 20k in Pell grants, I have been puzzled (more than usual). I thought grants were gifts and not loans. My understanding was Pell grants didn't have to be paid back unless there was a change of course. So, does this effect only Pell grant recipients who, for one reason or other, failed to complete their degrees in their declared major. Maybe I'm making this more difficult than it needs to be as usual.

I’m not sure, but I think that those QUALIFYING for Pell grants can have $20k forgiven of separate loans.

 

[TennesseeTarheel]

I’m not sure, but I think that those QUALIFYING for Pell grants can have $20k forgiven of separate loans.

So, Pell grant recipients can have 20k in federal loans forgiven, above and beyond the gift of the Pell grants. Wowee!

 

[jp1]

I keep hearing this will be beneficial for people that took loans out many years ago. Who wouldn't have consolidated their loans (with a private lender) at lower interest rates? Wouldn't this effectively make them ineligible for the $10k because it's no longer with a federal lender?

 

[GAVol]

I keep hearing this will be beneficial for people that took loans out many years ago. Who wouldn't have consolidated their loans (with a private lender) at lower interest rates? Wouldn't this effectively make them ineligible for the $10k because it's no longer with a federal lender?

One would think…. Bottom line though is that there are a lot of unknowns and likely a court challenge over whether the Executive Branch can even do this.