At last, up to 43 million borrowers in the United States can finally expect some relief from their student loan debts.
President Joe Biden announced his administration’s game plan for tackling federal student debt forgiveness in August. The three-pronged plan, which has since undergone revisions that have altered the qualifications for forgiveness, could cancel up to $20,000 in debt for Pell Grant recipients and $10,000 for individual borrowers.
The application for student loan relief is expected to drop soon. Here’s everything you need to know before then.
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How can I apply for debt relief?
The Department of Education will release a “simple application process” for federal student loan forgiveness. Though the specific details have yet to be announced, documentation and your Federal Student Aid ID will not be required to apply.
Some eight million people whose information is already acquired by the Department of Education will automatically receive relief unless they choose to opt out. Still, the department encourages every eligible person to submit an application.
To be notified about the application process, subscribe to the Department of Education here.
When can I apply? Is there a deadline?
Secretary of Education Miguel Cardona previously announced that the application would be available by early October.
Following the outbreak of the COVID-19 pandemic in March 2020, the federal government suspended student loan payments. But the pause on repayments will officially end this year on December 31. To receive relief before repayments resume, borrowers must apply by November 15. The last official day to submit an application for relief is December 31, 2023.
Public service workers who have served in federal, state, local, or tribal government, or a nonprofit organization, for 10 years or more may be eligible to have all their student debt canceled—even if those 10 years were not worked consecutively. Those who have not yet served 10 years can still apply to get credit toward forgiveness. Eligible borrowers must apply before October 31. Any enrollments after October 31 will not be eligible.
What are the qualifications?
Debt relief will cover individual borrowers who make less than $125,000 per year or households that make less than $250,000 per year. Any individual or household within the top 5 percent of incomes will not be included under the plan.
Pell Grant recipients can expect to receive up to $20,000 in debt cancellation, while non-Pell Grant recipients can get up to $10,000 of their debt canceled.
The amount of debt canceled will depend on the remaining balance of your debt. For example, if you were a Pell Grant recipient with $17,000 in debt, then you will receive $17,000 in relief rather than $20,000.
After I apply, when can I expect relief?
Most borrowers can expect to receive relief within six weeks, according to the Department of Education.
Has anything changed since Biden announced the plan?
Amid various lawsuits being filed by Republican-led states against Biden, his administration quietly rolled back eligibility for the student loan forgiveness plan in late September.
Borrowers with privately held FFEL and Perkins loans—about 770,000 people, according to The Associated Press—are no longer eligible for debt cancellation. These borrowers are the contested subject of a suit brought up by the state attorneys general in Missouri, Arkansas, Kansas, Nebraska, and South Carolina, plus legal representatives from Iowa. The states argued that the mass debt cancellation would impede on the flow of state revenue since it could lead to more borrowers consolidating their loans.
Now, under these new changes, these borrowers are out of luck for debt relief unless they consolidated their loans into the federal government’s direct lending program before September 29.
Follow this page for updates.
Chelsey Sanchez is an Associate Editor at HarpersBAZAAR.com, where she covers pop culture, politics, and social movements.
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