EDUCATION: Student Loan Forgiveness
In August 2022, President Biden announced plans to forgive up to $20,000 for eligible federal student loans. While student loan forgiveness is great news for your finances, it could affect your credit scores.
If there’s still a balance on your student loan after you receive your student loan forgiveness, you likely won’t see a major change in your credit scores.
However, if the student loan forgiveness pays off one of your loans, you may notice a small drop in your credit scores. This is normal and often happens when an account closes. Most people won’t be affected by this temporary drop, but it’s something to keep in mind if you’re planning to apply for a mortgage or loan soon.
