How to apply for student loan forgiveness
Note: This article will be updated once the application is available in early October.
The Biden administration proposed canceling all federal debt for undergraduate students during the 2020 election campaign. Now, in October 2022, she has partially fulfilled that promise.
According to the Biden-Harris Student Debt Relief Plan, approximately 40 million middle-to-low-income Americans are eligible for debt relief on up to $20,000 worth of federal student loans. For an estimated 20 million people, this will pay off all of their debt. Most people who are eligible for loan forgiveness make $75,000 or less a year.
Here’s a breakdown of how the loan forgiveness program works and how to apply for it.
Student loan debt reached $1.6 trillion in 2022, more than 90% of which was federal student loan debt. As of March 13, 2020, all federal student loan repayments have been suspended, and with payments resuming in 2023, the Biden administration hopes to offset some of the financial strain on borrowers when payments resume.
According to the plan, federal student loan borrowers will cancel up to $10,000 or $20,000 worth of debt one time, depending on their eligibility. The plan also strengthens borrower protections and improves federal income-based student loan repayment schedules.
Any person who has federal student loan debt and made in 2020 or 2021 less than $125,000 per yearor households that have made less than $250,000 per year, Eligible for student loan debt relief. The federal student loans must also have been paid out to you before July 1, 2022.
If you did If you receive a Pell Grant in college and meet the income requirements, you can have up to $20,000 of federal student loan debt cancelled. You can see if you’ve received a Pell Grant on your studentaid.gov account dashboard.
If you Not If you receive a Pell Grant in college and meet the income requirements, you can have up to $10,000 of federal student loan debt cancelled.
Current students are eligible for debt relief provided the loans were granted before July 1, 2022. Borrowers who are financially dependent on their parents can apply using their parents’ income information.
This means that loan forgiveness is limited to the amount you actually owe in student loan debt. If you are eligible for $20,000 in loan forgiveness but only have $12,000 in student loan debt, only $12,000 will be forgiven. You would not receive the other $8,000.
It’s a simple form that you’ll have to fill up 12/31/2023, Submit.
Some borrowers receive this debt relief automatically because the federal government already has income data from 8 million borrowers. In this case you will receive an email. For all others, apply online (a paper version of the form will be available at a later date).
Keep an eye on studentaid.gov, as this is where you will most likely be applying for one-time student loan debt relief. But be sure to check with your loan servicer about loan repayment and the process of applying for a waiver. Update your contact information for both accounts if they aren’t already up to date.
The application will be available in early October 2022 and you have until December 31, 2023 to submit it. However, if you want debt relief to be applied to your loans before January repayments begin, you must do so Submit your application by November 15, 2022.
You can subscribe to the Ministry of Education newsletter to be notified when the application is officially available. See the Ministry of Education FAQ for more information.
After you submit your application, you will see a confirmation of receipt web page and receive an email confirming that your application has been submitted.
You can call 833-932-3439 for help (once the application is available).
Your Federal Loan Servicer should notify you once the debt has been canceled from your account, with details of how the debt relief was applied.