College planning expert outlines what you need to know about loan forgiveness plan

'The key thing is to be patient,' Joe Orsolini says
Posted at 4:52 PM, Aug 25, 2022
and last updated 2022-08-25 18:23:31-04

WEST PALM BEACH, Fla. — The student loan forgiveness announcement has many people asking multiple questions about qualifications and eligibility.

WPTV spoke Thursday with Joe Orsolini, the president of College Aid Planners, during a live discussion on the WPTV Facebook page.

Orsolini is one of the nation's top experts in helping families prepare for the expense of college.

He said those who might benefit from the plan need to keep abreast of the details since the rules have not been published, and there may be legal challenges that could delay the benefit.

WATCH: Facebook Q&A: Student Loan Forgiveness

Facebook Q&A: Student Loan Forgiveness

RELATED: Who is eligible for federal student loan forgiveness?

"I think the key thing is to be patient," Orsolini said. "If you put that pile of money away, don’t say, 'Whoo-hoo, I can spend that money!' Until the forms are out, until everything is signed sealed delivered, assume that this may fall apart."

Under the plan, individuals with annual incomes under $125,000 — or families making $250,000 — qualify for the loan forgiveness. 

So, are we talking about parents or students?

RELATED: What happens next after President Biden's student loan announcement?

"So that's one of the great mysteries of this whole thing, and I don't have the answer yet," Orsolini said. "Is it the parents' income it's generated off of? Is it the kids who are dependent students of the parents, how they filed their tax return last year? Is it the kids who are off on their own? We don't know that officially yet."

Will high school students and their parents benefit from this program for their future loans?

President Joe Biden speaks about student loan debt forgiveness in the Roosevelt Room of the White House, Wednesday, Aug. 24, 2022, in Washington.
President Joe Biden speaks about student loan debt forgiveness in the Roosevelt Room of the White House, Wednesday, Aug. 24, 2022, in Washington.

"Right now, you tell them, they’re out of luck. That's the unfortunate truth," Orsolini said. "My son is a college freshman. He just took out his loan this week as part of paying his tuition bill. Those loans aren't forgiven. The loans had to be in place by June 30, 2022."

Orsolini added that this recently past June 30 deadline also affects students still in college.

For example, if a student just finished their sophomore year, they would be eligible for relief for their federal loans from their first two years of college. 

But the federal loans for their junior year would not count because schools traditionally do not receive payment until August or September, which is too late for the June 30 deadline. 

RELATED: How to apply for student loan forgiveness

Many individuals and political groups are angry, saying the program is a giveaway, and have threatened to sue.

"I don't know that this will be settled by the end of the year when they're talking about rolling this whole thing out," Orsolini said.

Orsolini added that the plan will save the average recipient $95 a month, which is about the price of a monthly cellphone bill. 

Meantime, students who took out loans but did not graduate are still eligible for the program.