Here’s what you need to know about the student debt relief application
The Biden administration officially launched its student debt relief application on Monday, ending months of anticipation from millions of American borrowers.
The debt forgiveness website, which was first released by the administration for beta testing on Friday, features what officials have argued is a relatively simple application process.
President Biden announced his plan for student loan debt relief in August, forgiving $10,000 in student loan debt for those making under $125,000 annually and $20,000 for Pell grant recipients.
But since then, the administration rolled back eligibility amid legal concerns, complicating matters for some student borrowers.
The White House announced Monday that as many as 8 million people have already applied for forgiveness through the Department of Education’s website.
Now that it’s official, here’s what you need to know:
Determine your eligibility
The Biden administration has rolled back some eligibility rules since the student debt relief plan was announced in August. (iStock)
While relief is available to millions of borrowers, there are still a large chunk of debtors that do not qualify.
A person is eligible if they have federal student loans that are held by the government and make less than a certain amount of money a year.
An individual making less than $125,000 a year and couples making less than $250,000 a year will be allowed to receive the student loan relief as long as their federal loans are held by the government.
The Biden administration’s plan initially let federal loans held by private entities 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 private loans that are guaranteed by the federal government.
Parents who have borrowed money to pay for their child’s education can also use the program to get some relief if they 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 may qualify for automatic forgiveness
About 8 million borrowers will have their debt automatically forgiven by the Department of Education. (Getty)
A few million borrowers will not have to fill out the application to receive the debt relief.
The Department of Education has enough information to automatically forgive debt accrued from about 8 million borrowers.
The department can use Free Application for Federal Student Aid (FAFSA) and income-driven repayment application information to figure out who is eligible for automatic loan forgiveness.
A person who qualifies for this kind of automatic forgiveness will receive a notification from the department either via email or text, if they signed up for text notifications.
Filling out the application
In addition to the application, borrowers may be asked to provide additional financial documents that prove their income if the government requests them. (iStock)
The Department of Education has sent out emails and text messages alerting individuals to the open applications, which are relatively simple to complete. The official form is identical to the version released for beta testing over the weekend.
The form requires an individual’s name, date of birth, Social Security number, email and phone number.
Borrowers will have to attest under penalty of perjury that all the information provided is accurate, meaning there could be legal repercussions for falsified information.
A borrower may also have to agree to provide additional financial documents that prove their income if the government requests them. The Federal Student Aid office will review the applications and work with loan service providers to process relief.
Once a person’s application is accepted, they will get an email from the department notifying them of the acceptance and that their loan provider will be contacted to apply the relief.
Apply sooner rather than later
Borrowers are encouraged to submit their applications before Nov. 15 if they hope to receive the money before the student loan payments resume in Jan. 2023. (Getty)
The applications will be open until the end of 2023, but officials recommend that borrowers not drag their feet on the process.
Student loan payments will resume at the beginning of 2023 after a nearly two-year pause due to the pandemic and all of its employment-related woes.
It is recommended individuals apply for the debt relief before Nov. 15 if they are hoping to receive the payments in their accounts before the student loan payments resume Jan. 1, 2023.
It is unlikely Biden will extend the student loan pause, which began at the start of the pandemic in March of 2020.
Student loan payment freezes were extended three times under former President Trump and four times under Biden. There has not been much appetite for another additional extension since Biden announced the student loan forgiveness plan.
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