/https://specials-images.forbesimg.com/imageserve/6041673b97337caf123a7db0/0x0.jpg "17 million receive no stimulus checks – expect the same for the cancellation of student loans")
President Joe Biden (Photo by Alex Wong / Getty Images)
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You may not get a stimulus test—and the same can happen with the cancellation of student loans.
Here’s what you need to know.
Stimulus checks
If you got a first stimulus test and a second stimulus test, there was a good chance you would get a third stimulus test. However, after the House passed President Joe Biden’s $ 1.9 billion stimulus package, which included a third stimulus test, something changed. Initially, the criteria to get the third stimulus check was $ 1,400 for individuals or $ 2,800 for married or joint filers, based on the same income threshold as the first two stimulus tests: $ 75,000 income for individuals and $ 150,000 for married or joint filers. To appease the moderate Democrats in the U.S. Senate, who want the stimulus checks to be more targeted, the revenue threshold has been changed. The income threshold has now changed as follows:
Second stimulus check
- Individuals: $ 75,000 annual income (complete phasing out at $ 100,000)
- Married or joint files: $ 100,000 annual income (full phasing out of $ 200,000)
Third Stimulus Check
- Individuals: $ 75,000 annual income (complete phasing out at $ 80,000)
- Married or joint files: $ 100,000 annual revenue (full phasing out of $ 160,000)
According to after the Washington Post, this means that 17 million fewer Americans – including 12 million adults and 5 million children – will receive a stimulus payment. As a result, individuals earning between $ 80,000 and $ 100,000, as well as married or joint filers earning between $ 160,000 and $ 200,000, will not receive a stimulus test.
This can lead to bad news for the cancellation of student loans. Here’s why.
Will your student loans be canceled?
Will your student loans be canceled? You may be wondering what the new incentive package means for canceling student loans. The Congress abandoned the cancellation of student loans of the new stimulus package, nor did it include it in the last stimulus package. Now that 17 million Americans have cut their stimulus checks, you can expect the same to happen with the cancellation of student loans. This means that the cancellation of student loans can be limited in several ways. The current income threshold for student loan cancellation is targeted at individuals at $ 125,000. Elizabeth Warren (D-MA) and Senate Leader Chuck Schumer (D-NY), for example, want to cancel a student loan of up to $ 50,000 for lenders on executive orders. It only applies to federal student loans and is only available to borrowers with an income of less than $ 125,000. Biden uses the same income threshold for his class-free college student loan plan. If Congress is willing to reduce stimulus testing to be more purposeful, you can expect the cancellation of student loans to be similarly curtailed.
The income threshold for the third stimulus test is already $ 50,000 less than the income threshold for the proposed cancellation of student loans ($ 75,000 versus $ 125,000). Will progressive Democrats be able to justify skeptical Republicans and moderate Democrats an income threshold that is $ 50,000 higher than the threshold for stimulus controls? If Congress cancels student loans, forgiveness of student loans is likely to become a struggle amount (For example, $ 50,000 versus $ 10,000) and who qualifies (For example, $ 75,000 annual income versus $ 125,000). So it is not as simple as asking if the student loan debt will be canceled. This is just the first question. The bigger questions are how much student loan debt should be canceled and how targeted cancellation for student loans will be. Some members of Congress want $ 2,000 stimulus examinations every month until the Covid-19 pandemic is over. If Congress passes additional stimulus tests, Republicans and moderate Democrats are likely to object to the cancellation of large-scale student loans – namely costs. This could lead to more discussions about focusing on forgiveness for student loans. As a result, millions of the 45 million student loan borrowers hoping for student loan cancellations will not get what they want.
Pay off student loans
If you have student loans, make sure you understand all of your student loan repayment options. As Congress debates large-scale student loan forgiveness, it is unclear whether student loan forgiveness will come, how many there will be, and who will qualify. Here are some possible options: