Student Loan Forgiveness Dates to Remember: How and When Borrowers Need to Act

An activist holds a cancel student debt sign as they gather to rally in front of the White House in Washington, DC, on Aug. 25, 2022. Biden announced the day before that most U.S. university graduates still trying to pay off student loans will get $10,000 of relief. Getty Images
An activist holds a cancel student debt sign as they gather to rally in front of the White House in Washington, DC, on Aug. 25, 2022. Biden announced the day before that most U.S. university graduates still trying to pay off student loans will get $10,000 of relief.
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President Joe Biden’s plan for student loan forgiveness is official, but borrowers still have more questions than answers.

And there’s one question, in particular, that’s top of mind for borrowers: When can borrowers who qualify for $10,000 or $20,000 in student loan forgiveness expect their debt to be canceled?

Biden said last week he will eliminate $10,000 worth of federal student loan debt for borrowers who make less than $125,000 annually. In addition to that, he promises to erase up to $20,000 in debt to those who borrowed money under the Pell Grant program, which mainly targets low-income students and families. Nearly all Pell Grant borrowers came from families that made less than $60,000 a year, and they typically experience more challenges repaying their debt than other borrowers, according to a White House fact sheet.

He also said he would extend the federal student loan payment pause one more time through Dec. 31. But not everyone is ready to believe this is truly the last extension. Robert Farrington, a higher education expert and founder of The College Investor, says it will be interesting to see if “this is really the ‘final’ final pause extension.”

“I am a bit concerned about the timing of everything and the ability of loan servicers to handle everything,” he says. “We’re asking loan servicers to start repayment, handle refund requests, and deal with the influx of calls. I worry that the transition to begin repayment might not be smooth.”

Despite the largely undefined and complex process ahead, borrowers should expect to have less debt in their accounts before the end of the year, according to the latest update from the Department of Education. Still, there are some important dates for student loan borrowers to keep in mind in the coming weeks and months.

Answering Your Student Loan Questions

Do you have questions about student loan forgiveness? Check out our FAQ, which we’re regularly updating as more details become available. If there are any questions we didn’t answer about Biden’s new student loan plan in the FAQ, email me at alex@nextadvisor.com and I’ll do my best to answer it.

Important Dates to Know for Student Loan Forgiveness

Of the 45 million student loan borrowers, most will need to fill out an application to see if they qualify for student loan forgiveness. That’s because the Department of Education only has income information for 8 million borrowers who enrolled in income-driven repaying plans or recently filled out a FAFSA. In other words, the majority of borrowers won’t receive relief automatically. 

Early October 

Naturally, many borrowers are wondering when the application will become available. The latest update is from Secretary Miguel Cardona of the Department of Education, who recently tweeted out a timeline for the student loan forgiveness application. Borrowers can expect the application to be available by early October, according to Cardona. 

Nov. 15, 2022

Once you submit your application, you can expect relief within 4-6 weeks if approved. The Department of Education recommends filling out the application before Nov. 15 to receive forgiveness before payments resume in January. 

Dec. 31, 2023

The Department of Education said the application for student loan forgiveness will remain open through the end of next year, but you may not receive relief before the payment pause period ends if you don’t fill it out before mid-November. 

Keep in mind that there could be delays to this process if loan forgiveness ends up being challenged in court. The Department of Education, alongside the Department of Justice, released a legal opinion last week in defense of the groundbreaking administrative move, citing the 2003 Heroes Act. However, loan servicers and Republicans could potentially sue to stop Biden’s loan forgiveness plan from moving forward, as our partners at TIME recently reported.

What Should Student Loan Borrowers Do in the Meantime?

While borrowers wait for more guidance from the Biden administration or the Department of Education, the most important thing they can do for now is check that their contact information — like home address, email address, and phone number — is up to date with their loan servicer. That way, you can get the latest information on student loan forgiveness and how it’ll affect your balance or monthly payments. You can see who exactly your student loan provider is on studentaid.gov, and you can sign up to receive email updates on loan forgiveness. 

In the coming months, experts recommend that you continue to take advantage of the pause on federal loans through the end of the year. Use this time to prioritize other important aspects of your finances, like building an emergency fund of savings, paying down high-interest debt, or investing in a traditional retirement plan. Those are areas where you can make your money go further right now. 

“With the federal government’s forgiveness of up to $20,000 in student debt, newly minted graduates and older borrowers now can sock away that extra money for the future, ”says Rob Michel, chief investment officer of wealth management firm Glen Eagle Advisors. “Re-integrate the loan payments into their normal spending habits or invest some or all of those payments to build their personal wealth.”