- Applications for student debt forgiveness will be available soon.
- Borrowers should start preparing now to apply to ensure there’s no delay in getting debt relief.
- Some 8 million people won’t have to do anything to get their debt canceled. Find out if you’re one.
On your marks, get set.
Federal student debt forgiveness applications are about to drop, and you don’t want to be caught flat-footed.
People who earned $125,000 or less (or $250,000 for households) in 2020 or 2021 are eligible for at least $10,000 in federal student loan debt forgiveness. Recipients of Pell Grants – usually awarded to low-income undergrads – can receive up to $20,000 in relief.
Roughly 40 million borrowers are eligible for some student debt relief, with about 20 million expected to have their entire balance canceled, the White House says.
If you’re one of the lucky ones, here is what you should do to ensure some or all of your debt is forgiven before repayments restart in January.
When will the application for student debt forgiveness go live?
The federal government has said early October. On Friday, White House press secretary Karine Jean-Pierre said there was “no date set yet” for the release of the application form, but confirmed it would still be released in October.
“We’re trying to give relief to everyday Americans,” Jean-Pierre said.
Ensure you’re qualified for student debt forgiveness
Only borrowers with federal loans are eligible for relief if their individual income is less than $125,000 or $250,000 for households. Pell Grant recipients can get up to $20,000 canceled, and everyone else up to $10,000.
Public service workers (people working for federal, state, local, tribal government, military, or a non-profit organization) with at least 10 years of service (It doesn’t need to be consecutive.) may be eligible to have all their debt canceled.
The government recently tweaked the requirements for the program to allow more borrowers to qualify for forgiveness, but it’s a limited time offer. Interested borrowers must apply before Oct. 31 if they want to take advantage of the temporary flexibility.
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A parent with parent PLUS loans for their child may qualify for debt relief if they meet the income eligibility criteria.
Private loans aren’t eligible for any forgiveness.
How can I tell if I had a Pell Grant?
Create an account (an FSA ID) at StudentAid.gov or log in if you already have one. Make sure your contact information is accurate. If you’ve forgotten your log in information, use the Forgot My Username or Forgot My Password links or go to the tips page for help.
You’re not required to have an FSA ID to apply for forgiveness, but this can be extremely helpful. It’s where for example, you’ll find if you received a Pell Grant while in college. It will also show your loan servicer(s), types of loans you have and what you owe. (If you received a Pell Grant before 1994, that information won’t display in StudentAid.gov, but you’ll still receive the full benefit. The Department of Education has a record of every Pell Grant award.)
The government will send you updates by email and text message, so make sure to sign up to receive text alerts.
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Alert your loan servicer
Make sure your loan servicer has your most current contact information so they can reach you. If you don’t know who your servicer is, you can log into your StudentAid.gov account and see your servicer(s) in your account dashboard.
Your servicer(s) will process the relief and notify you when the relief has been applied to your account. The White House says most borrowers will see the forgiveness reflected in their accounts within six weeks.
If you still have a balance after debt forgiveness, your monthly payment will be recalculated based on your new balance, potentially reducing your monthly payment. Your loan servicer will let you know what your new payment amount is. The White House says borrowers should apply by mid-November to receive relief before the payment pause expires on Dec. 31. However, the application window will stay open through 2023.
Complete and submit the application
The application for student debt relief is expected to be available this month. Once it is ready, you should receive an email alerting you or you can keep checking StudentAid.gov for updates.
Borrowers won’t need to upload any documentation or have an FSA ID to submit their application. Initially, the application will be available only online. A paper version will be made available later.
As many as 8 million borrowers will receive automatic forgiveness because the federal government already has their income and loan information – if they don’t opt-out. The department uses Free Application for Federal Student Aid (FAFSA) and income-driven repayment application information to identify those borrowers – or, as appropriate, parents – who have submitted income data for tax years 2020 or 2021.
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Can I get a refund of past student loan payments?
Yes, borrowers may be eligible for refunds, but only if they made payments during the pandemic that brought their balance below the relief they would be eligible to receive. So if you had $11,000 in debt before March 13, 2020 and paid it down to $9,000, you could receive a $1,000 refund.
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Which loans are eligible for forgiveness?
Federally held subsidized loans, unsubsidized loans, parent PLUS loans, and graduate PLUS loans are eligible. Consolidated loans also qualify for relief as long as all the combined loans that are federally held were taken out on or before June 30.
Last week, the Education Department said borrowers with Federal Family Education Loans (FFEL) that are commercially held can no longer apply for debt relief by consolidating their loans into the Direct Loan program. But they will be eligible if the loans were consolidated before Sept. 29.
When asked about the FFEL borrowers who no longer qualify for the program, Jean-Pierre said the goal has always been to get relief to borrowers as fast as possible.
“This change helps us achieve that,” she said.
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Is this for real?
Several lawsuits claim the loan forgiveness plan is harmful or that the president is overstepping his authority. Any one of them has the potential to block the plan or delay it.
Jean-Pierre said she couldn’t say if there would be additional changes to the program that would further winnow the pool of eligible borrowers (and serve to circumvent a lawsuit).
She did say it was “unfortunate” that some people in Republican states were making it more difficult to give “a little bit of a breathing room to working Americans.”