As 2022 winds down and everyone looks ahead to the New Year, it's worthwhile to look at your end-of-year checklist and ensure you are not missing out on any opportunities. All weeklong, Infinity Wealth Counsel will be sending you information that will focus on taking the right steps today for a wealthier tomorrow. Some of these topics may just be news headlines to make you aware of upcoming changes, others may be guiding you towards making some small, yet crucial financial decision before the years end. We hope you enjoy this weeks information, and if you have any questions, we are always here for you.
Student Aid
The FASFA for must be submitted by 11:59 PM Central Time by June 30th, 2023. However, you're more likely to qualify for federal, state, and college-offered grants if you file the FAFSA early. In fact, Saving for College reported that students who fill out the FAFSA between October and December get twice as many grants, on average, as compared with students who file the FAFSA later.
Loan Forgiveness
If have loans held by the US Department of Education and have a qualifying income (less than $125,000 for single or $250,000 married), you can apply for debt relief through the Department of Education website at https://studentaid.gov/debt-relief/application. The deadline to apply is not until December 31, 2023. However, we encourage you to apply now, as this may affect your payments next year.
Please be aware that there are already reports of scammers charging people to help them with this process. There is no charge to apply and the process is easy and should not require assistance.
529 Contributions
Depending on your state of residence, you may be eligible for a state tax deduction for contributions to 529 education savings accounts. This deduction can also be taken by grandparents or other family members who contribute to a 529 plan which is sponsored by the donor’s state of residency. If family members are gifting money for college this Christmas, be sure that the funds are deposited by year end.
Loan Payments
Payments on student loans were supposed to be resuming in January, however with the forgiveness program tied up in courts, the Biden administration is extending the pause on federal student loan payments. Officials had told borrowers the forgiveness program would be implemented before loan payments were set to resume in January.
The payment pause will last until 60 days after the litigation is resolved. If the program has not been implemented and the litigation has not been resolved by June 30, payments will resume 60 days after that, according to the Department of Education.
We hope you have found this four-part End-of-Year checklist helpful. If you have questions about any of the topics discussed, or think that they may help you, please reach out to Infinity Wealth Counsel to discuss how we can help you prepare for a better tomorrow, today.
*This article has been edited since the original post to reflect recent changes to the student loan repayment freeze.