/https://specials-images.forbesimg.com/imageserve/6041673b97337caf123a7db0/0x0.jpg "17 million will not receive stimulus checks – expect same for student loan cancellation")
President Joe Biden (photo by Alex Wong / Getty Images)
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You may not get a stimulus check –and the same can happen with the cancellation of the student loan.
Here’s what you need to know.
Stimulus checks
If you got a first stimulus check and a second stimulus check, there was a good chance of getting a third stimulus check. However, after the House approved President Joe Biden’s $ 1.9 trillion stimulus package, which included a third stimulus check, something changed. Initially, the criterion for obtaining the third stimulus check of $ 1,400 for individuals or $ 2,800 for married or joint filers was based on the same income limit as the first two stimulus checks: $ 75,000 in income for individuals and $ 150,000 for married or joint filers. So, to appease moderate Democrats in the U.S. Senate who wanted stimulus checks to be more targeted, the income cap was changed. Now, the income limit has changed as follows:
Second stimulus check
- Individuals: $ 75,000 in annual revenue (complete elimination at $ 100,000)
- Married or joint archivers: $ 100,000 in annual revenue (complete elimination of $ 200,000)
Third stimulus check
- Individuals: $ 75,000 in annual revenue (complete elimination at $ 80,000)
- Married or joint archivers: $ 100,000 in annual revenue (complete elimination of $ 160,000)
According to 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 who earn between $ 80,000 and $ 100,000, as well as married or joint filers who earn between $ 160,000 and $ 200,000, will not receive any stimulus checks.
This can mean bad news for the cancellation of the student loan. Here’s why.
Will your student loans be canceled?
Will your student loans be canceled? You may be wondering what the new stimulus package means for student loan cancellation. Congress removed the cancellation of the student loan from the new stimulus package, and it was also not included in the last stimulus package. Now that stimulus checks have been cut for 17 million Americans, you should expect the same to happen with student loan cancellations. This means that the cancellation of the student loan can be limited in several ways. The current income limit for canceling student loans is set at $ 125,000 for individuals. For example, Senator Elizabeth Warren (D-MA) and Senate Majority Leader Chuck Schumer (D-NY) wish to cancel student loans of up to $ 50,000 for executive borrowers. This would apply only to federal student loans and would only be available to borrowers with an income of less than $ 125,000. Biden uses the same income limit for his free college student loan plan. If Congress is willing to cut stimulus checks to be more targeted, you can expect the cancellation of the student loan to be similarly limited.
The income limit for the third stimulus check is already $ 50,000 less than the income limit for the cancellation of the proposed student loan ($ 75,000 versus $ 125,000). Will progressive Democrats be able to justify skeptical Republicans and moderate Democrats an income limit of $ 50,000 higher than the limit for stimulus checks? If Congress cancels student loans, student loan forgiveness is likely to become a battle between amount ($ 50,000 versus $ 10,000, for example) and who qualifies ($ 75,000 in annual income vs. $ 125,000, for example). Therefore, it is not as simple as asking if you are going to cancel student loan debt. That is just the first question. The biggest questions are how much student loan debt should be canceled and how targeted the student loan cancellation will be. Some members of Congress want $ 2,000 stimulus checks every month until the end of the Covid-19 pandemic. If Congress passes additional stimulus checks, moderate Republicans and Democrats are likely to raise objections to the cancellation of large-scale student loans – namely, the cost. This can lead to further discussions on how to target student loan forgiveness. As a result, millions of the 45 million student loan takers waiting for the student loan to be canceled may not get what they want.
Payment of student loans
If you have student loans, make sure you understand all of your options for student loan repayment. While Congress is debating the forgiveness of the student loan on a large scale, it is unclear whether the forgiveness will occur, how much will be and who will qualify. Here are some possible options: