Millions of Americans can take their first step to cancel between $10,000 and $20,000 in federal student loan debt.
The Department of Education launched a “simple and easy to use” application for student loan forgiveness in recent weeks, recommending borrowers apply by Nov. 15 to have the relief applied to their balances before student loan payments resume in January.
If you haven’t applied yet, we’re hosting a free live webinar on Nov. 15 at 6 p.m. EST with student loan expert Robert Farrington to answer questions and walk through the application. We’ll also update you on where Biden’s student loan relief plan stands legally.
Biden’s plan allows borrowers who earn under $125,000 to cancel $10,000 in federal school loan debt, while married couples qualify for $10,000 per person in debt cancellation if their joint income is under $250,000. Borrowers with Pell grants, which primarily target low-income students, qualify for an additional $10,000 in loan cancellation, or a total of $20,000, if they meet the income requirements.
While Biden’s loan forgiveness plan was welcomed by those with student loan debt, it faced immediate challenges from political opponents. The relief plan has been stalled in federal court due to a legal challenge brought by six Republican-led states, and the Biden administration can’t forgive any student debt until the temporary pause is lifted.
In the face of mounting legal challenges, the Biden administration quietly reversed debt cancellation for hundreds of thousands of borrowers. Borrowers who have Perkins loans and Federal Family Education Loans (FFEL) with private lenders no longer qualify for loan cancellation if they didn’t apply to consolidate them before Sept. 29, according to the updated guidance from the Department of Education.
The White House estimates roughly 43 million federal student loan borrowers are eligible for forgiveness, but most will need to complete the application to receive it. The Department of Education only has income information for about 8 million borrowers and recommends every federal student loan borrower apply — even those who may automatically qualify.
How to Fill Out the Student Loan Forgiveness Application
The application for student loan forgiveness is short and requires no supporting documents or an FSA ID. It asks borrowers for their full name, Social Security number, date of birth, phone number, and email address.
At the end of the application, borrowers must attest that they’re requesting federal student loan debt relief and their 2020 or 2021 income was below the income caps. Once submitted, the Department of Education will review your application and work with your loan servicer to process the relief. The Department of Education will contact you if it needs additional income information and notify you if and when it’s been approved.
Important Dates and Details for Student Loan Forgiveness
Now that the application is live, here are some other key dates and details to keep in mind for student loan forgiveness:
Nov. 15: Recommended Deadline to Apply
Start gathering your income information now because the Department of Education recommends filling out the application by Nov. 15 to receive forgiveness before payments resume in January. Once you submit your application, you can expect relief within 4-6 weeks if approved.
Jan. 1, 2023: Student Loan Payments Resume
Federal student loan payments are currently set to resume at the start of next year after a three-year hiatus. Experts recommend putting together a future budget now that accounts for potentially lower monthly student loan payments and using this time to focus on other important aspects of your finances. Build an emergency fund, pay down high-interest debt, or invest in a traditional retirement plan as those are areas where you can make your money go further right now.
Dec. 31, 2023: Application Closes
The Department of Education will continue to process applications for student loan forgiveness through the end of 2023, but you should apply by mid-November to receive relief before the payment pause period ends.
If you qualify for forgiveness, it’s important to update your contact information with your loan servicer, check your mail or email for up-to-date information about your loans.
How to Avoid Scams and Safely Apply for Student Loan Forgiveness
Be careful if you’re receiving emails, phone calls, and text messages from unrecognizable numbers and people about student loan forgiveness. Federal officials have sounded the alarms about scams and misinformation tied to Biden’s loan forgiveness.
The White House recently said it plans to crack down on student loan scammers nationwide, and pointed to guidance to help borrowers avoid fraud in connection to student loan forgiveness. These are some dos and don’ts, according to the Department of Education:
- Don’t pay anyone to forgive your loans. The application for student loan forgiveness is free.
- Don’t give anyone your FSA ID, account information, or password. The Department of Education or your loan servicer will never call or email you asking for that information.
- Never give out personal or financial information to someone you don’t know over the phone.
- Don’t refinance your federal student loans unless you know the risks. If you refinance your federal student loans into a private loan, you’ll no longer be eligible for Biden’s one-time debt cancellation plan.
- Create an FSA ID on studentaid.gov. You won’t need it to apply for forgiveness, but it gives you easy access to important information about your loans.
- Make sure your contact information is up to date with your loan servicer. If you don’t know who your loan servicer is, log into your account on studentaid.gov to find out.
- Sign up for email alerts at www.ed.gov/subscriptions to get important updates on Biden’s loan forgiveness plan.
Report scammers to the Federal Trade Commission.