Here’s what you need to know about applying for student debt relief
The Biden administration officially launched its request for student debt relief on Monday, ending months of anticipation by millions of American borrowers.
The debt forgiveness website, which was first released by the administration for beta testing on Friday, features what officials said is a relatively straightforward application process.
President Biden announced his student debt relief plan in August, canceling $10,000 in student loan debt for those earning less than $125,000 a year and $20,000 for Pell grant recipients.
But since then, the administration has canceled the eligibility due to legal issues, which complicates matters for some student borrowers.
The White House announced on Monday that as many as 8 million people have already asked for forgiveness through the Department of Education website.
Now that it’s official, here’s what you need to know:
Determine your eligibility
Although millions of borrowers are receiving relief, there are still a large number of debtors who do not qualify.
A person is eligible if they have federal student loans held by the government and earn less than a certain amount of money per year.
A person earning less than $125,000 a year and couples earning less than $250,000 a year will be eligible for student loan relief as long as their federal loans are held by the government.
The Biden administration’s plan initially allowed federal loans held by private entities to qualify, but reversed the decision after legal challenges emerged.
Private loans that are no longer eligible include Federal Family Education Loan Program (FFELP) loans, which are federally guaranteed private loans.
Parents who have borrowed money to pay for their child’s education can also use the program to get some relief if they have used Parent PLUS loans.
Parents can use the same Department of Education application as student borrowers for debt forgiveness, but are required to use their information.
You can benefit from an automatic forgiveness
A few million borrowers will not have to complete the application to qualify for debt relief.
The Ministry of Education has enough information to automatically cancel the debt accumulated by approximately 8 million borrowers.
The department may use the Free Application for Federal Student Aid (FAFSA) and Income-Based Refund Application information to determine who is eligible for automatic loan forgiveness.
A person eligible for this type of automatic pardon will receive a notification from the department, either by email or SMS, if they have signed up for SMS notifications.
Fill out the application
The Department of Education has sent emails and text messages alerting individuals to open applications, which are relatively straightforward to complete. The official form is identical to the version released for beta testing over the weekend.
The form requires a person’s name, date of birth, social security number, email, and phone number.
Borrowers will be required to certify under penalty of perjury that all information provided is accurate, meaning there could be legal repercussions for falsified information.
A borrower may also be required to agree to provide additional financial documents proving income if requested by the government. The federal student aid office will review applications and work with loan service providers to process relief.
Once a person’s application has been accepted, they will receive an email from the department notifying them of the acceptance and that their loan provider will be contacted to apply the relief.
Apply as soon as possible
Applications will be open until the end of 2023, but officials advise borrowers not to drag their feet in the process.
Student loan repayments will resume in early 2023 after a nearly two-year hiatus due to the pandemic and all its employment-related issues.
Individuals are recommended to apply for debt relief before November 15 if they hope to receive payments in their accounts before student loan payments resume on January 1, 2023.
Biden is unlikely to extend the student loan hiatus, which began at the start of the pandemic in March 2020.
The student loan payment freeze was extended three times under former President Trump and four times under Biden. There hasn’t been much appetite for another further extension since Biden announced the student loan forgiveness plan.