Student loan forgiveness application now available: What to know
People burdened by federal student loan debt have begun filing for one-time relief through a new program launched by the U.S. Department of Education.
The department got out the word via emails to borrowers and through a notice on its website during the past weekend, indicating that a soft launch of the application had begun. And later Monday, the official form was posted online with no reference to a beta test.
President Joe Biden on Monday officially encouraged tens of millions of borrowers to apply for debt relief, noting the soft launch went off "without a glitch or any difficulty" this past weekend.
Already, 8 million borrowers applied to see a portion or all of their federal student loans forgiven as part of the beta testing over the weekend, according to Education Secretary Miguel Cardona. That's roughly 20% or so of possibly 40 million eligible borrowers.
Kicking off the program now is essential for Democrats as the country moves closer to the midterm elections on Nov. 8.
Biden said the program is a “game-changer” for millions of Americans burdened by college debt.
Biden took a shot at Republican leaders who are charging that he has no authority to forgive the debt by invoking the HEROES Act of 2003 to offer widespread forgiveness in a national emergency. Six GOP-led states earlier brought a lawsuit against the Biden administration to try to halt the sweeping forgiveness plan, charging that the administration overstepped its executive powers. The states are Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina.
“Their outrage is wrong and it’s hypocritical,” Biden said, adding that he won't apologize for a debt forgiveness plan to help people as they recover from the pandemic.
Private student loans are not eligible and some older federal student loan debt might no longer be eligible for this one-time program that will eliminate up to $10,000 in debt for many borrowers and up to $20,000 in debt for many borrowers who had Pell Grants while in college.
The Education Department's website said Monday morning that if you submitted an application during the soft launch it would be processed when the form officially launches, and you won't need to resubmit an application.
The beta application first showed up online late Friday and continued to be available Monday. But the official application was kicked off online later in the day.
No applications would be processed until the site officially launches later this month, according to a U.S. Department of Education spokesperson on Monday morning.
The testing period was designed to enable the department to monitor site performance through real-world use, according to the spokesperson. The department was aiming to uncover any possible bugs prior to official launch.
The application is short and to the point. It's found at StudentAid.gov/DebtRelief.
Applicants do not need to dig up or fax any tax returns or documents. But you are claiming that you know your income for 2020 or 2021, so you should review your tax returns before submitting an application.
Could you run into possible, short delays now? Yes.
At times during the past weekend, those trying to find an application online were told that they had to wait. But don't panic. It was part of the testing process involved with software development.
"My understanding is the downtime was intentional," said Mark Kantrowitz, a student loan expert and author of "How to Appeal for More College Financial Aid."
The beta version is used to test the form’s functionality and the capacity of their web servers, he said.
Kantrowitz suggests that borrowers submit their applications as soon as they are able to do so. Today remains as good a day as any.
It's unknown if any glitches will take place as millions more borrowers attempt to use the system.
It will take four to six weeks after an application is processed to receive loan forgiveness. For many people, that could mean that they'll see $100 or $200 a month knocked off from their monthly federal student loan bills. Payments on federal student loan debt — which had been paused for nearly three years — are going to be required once again in January.
Should you panic if you can't fill out an application now? No.
You can apply today or later this week. But you cannot apply later than Dec. 31, 2023.
It is best to apply as soon as possible, however, given that payments are set to resume in January. Legal challenges also make some concerned about what could happen in the future to the program.
Biden and the Education Department are promising that filling out the application "takes about five minutes."
The Education Department states: "You don’t need to log in or provide any documents."
More: Student debt reliefHow the process works
Taking a look at the debt forgiveness application can help you be prepared to fill out the form. Borrowers are being asked:
Name; former name used, perhaps when you applied for loans but before you changed a name when married or divorced; and Social Security number.
Date of birth, phone number, email.
Borrowers also are agreeing to provide proof of income to the U.S. Department of Education at a later time. "I understand that if I fail to do so by March 31, 2024, or if my income does not qualify for federal student loan debt relief, the relief will not be processed," the application notes.
When you fill out the form, you're checking a box to affirm that you'd qualify for debt relief based on your income in 2020 or 2021. Did you earn less than the required income needed to file federal income tax return? Or if you're a single tax filer, did you make less than $125,000 in 2020 or 2021?
Or if you were married and filed taxes separately, did you make less than $125,000 in those years?
Someone who is married and filed a joint return or filed as head of household or qualifying widower would need to have made less than $250,000 in 2020 or 2021 to qualify for federal student loan forgiveness under the program announced by Biden in August.
The income requirements are based on your adjusted gross income, which tends to be lower than your total income. AGI is found on Line 11 of the 1040 tax return.
It is either 2020 or 2021 for those income limits. "You need to meet the income criteria for either 2020 or 2021, but you don’t need to meet it for both years," the Education Department states.
More: Student loan reliefWhat loans won't qualify
Again, no documents need to be submitted in order to file the application. But you are claiming that what you say on the application is true and you'd be subject to penalties, including legal action, for making a false claim.
For college students, it's important to know if you're being claimed as a dependent student for federal student aid purposes. If so, the income that will matter will be the income for one or both of your parents.
But the Education Department notes that students should apply for debt relief using their own income information. "If we identify you as a dependent student, we’ll email you with instructions for you and your parent. Until then, you don’t need to do anything except submit your application."
You'd be classified as a dependent for federal student aid if:
You were enrolled as an undergraduate student between July 1, 2021, and June 30, 2022.
You were born after Jan. 1, 1998.
You aren’t married.
What should parents do if they took out loans? Apply.
"If you’re a parent with eligible loans of your own, including parent PLUS loans, you can submit your own Student Loan Debt Relief Application. Your application will be processed separately from the one your child submits," the Education Department notes.
You are going to receive an email conformation after you submit an application for student loan debt relief. But your StudentAid.gov account will not show the status of your application.
The Associated Press contributed to this report.
Contact Susan Tompor: stompor@freepress.com. Follow her on Twitter @tompor. To subscribe, please go to freep.com/specialoffer.
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This article originally appeared on Detroit Free Press: Student loan forgiveness application available; 8 million already filed
