If you’re one of the millions of Americans with student loans, President Joe Biden‘s forgiveness plan may be welcome relief.
However, there are some key things to know about the income limits, experts say.
Biden will cancel $10,000 for most borrowers or up to $20,000 for Pell Grant recipients, limited to those making less than $125,000 per year or $250,000 for married couples filing together or heads of household.
And financial advisors have already received a flurry of client questions, including whether their income may be too high to qualify for the debt relief.
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“I have a lot of clients who are somewhere on the cusp,” many of whom are mid-career, dual-earning households, said Ethan Miller, a certified financial planner and founder of Planning for Progress, specializing in student loans in the Washington, D.C., area.
Adjusted gross income is the ‘magic number’
While eligibility may be simpler for borrowers far below or above the limits, it may be trickier for those near the $125,000 or $250,000 thresholds.
That’s because the number is based on so-called adjusted gross income, or AGI, which may be different than your gross salary.
“It’s the magic number,” Miller said, noting the U.S. Department of Education uses AGI for existing…
