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How Biden’s plan for student loans could impact Hoosiers

INDIANAPOLIS (WISH) — Millions of Americans are waiting to hear what could be a life-changing announcement from President Joe Biden on the future of some federal student loans.

Biden said on Twitter that he will announce Wednesday a plan to forgive $20,000 of student loan debt for recipients who went to college on Pell Grants and $10,000 for students who did not. Forgiveness only applies to those earning less than $125,000.

The Biden administration will also extend the moratorium on student loan repayments one final time, extending the pause through Dec. 31.

Biden said on Twitter that loan payments will be based on income. Anyone with undergraduate loans can cap repayment at 5% of their monthly income.

Bill Wozniak, vice president of marketing for INvestED, stopped by Daybreak on Wednesday to talk about what impact Biden’s plan could have on Hoosiers.

A lot of people are excited, Wozniak says, but they also have a lot of questions.

“What types of loans will it pertain to? Will it just be the federal loans? And then, when you get into the federal loans, what type will it be? the parent loans? Will it just be the traditional student loans? Will it be the graduate loans? We’re hearing that it might be multiple types of these but those details will be important,” Wozniak says.

People across the state, whether they have loans or not, are concerned about student loan debt and want to know more about Biden’s plan, according to Wozniak.

“It affects what currently is held, but also going forward. How does that impact when somebody in high school says, ‘I’m thinking about going to college?’ How does it impact them and that decision going forward? This will be part of something that’s going to play into the future.”

Wozniak and INvestED work with students and families to find financial aid during the college planning process. Wozniak says that they never jump straight into the loan process.

“We always start with every other bit of money. Grants. Pell grants, O’Bannon grants from the state, 21st Century Schols, and on and on and on. Institutional money from colleges and universities. We work all the way down and we attack the loan last.”

Wozniak says he hopes the plan announced by Biden will include a strategy for the future so the issue doesn’t have to be revisited every few years.

To contact INvestED, call 317-715-9015.