In the latest step of his plan, which may help as many as 43 million debtors, President Joe Biden revealed on Monday that the federal application for student loan forgiveness is now officially open.
Now available on Studentaid.gov is a form that may be completed in either English or Spanish by those looking to apply for student debt relief.
Student Loan Forgiveness Application
The form contains details about debt relief, including who is eligible for it and how it operates. It requests applicants' full names, Social Security numbers, dates of birth, phone numbers, and email addresses. Borrowers may submit applications up to December 31, 2023.
Borrowers must have student loans with a government guarantee to be eligible. In addition to federal Direct Loans used to pay for undergraduate degrees, graduate students and parents may also be eligible for federal PLUS loans provided they meet the income requirements, as per CNN.
Over the weekend, the website garnered more than 8 million visitors, but the administration believes there are about 40 million people who qualify for debt relief. For those who qualify, 50% of borrowers could have all of their debt forgiven. The most that can be waived is $20,000 in total.
The actual application is shockingly simple. The names, addresses, Social Security numbers, dates of birth, phone numbers, and email addresses of qualified candidates are requested. The majority of candidates shouldn't take longer than a few minutes to complete the form.
You don't even need to register for an account, upload any paperwork, or sign anything. After submitting your application, you ought to get a time-stamped confirmation email from the US. Your application was received by the Department of Education. You are not required to take any further action until you hear from them or your loan servicer.
To help identify candidates who are likely to exceed the income limitations, that information would be compared to Education Department records, according to the administration. These folks will be questioned further to demonstrate their incomes.
In a recent report to the White House's Office of Management and Budget, the Education Department stated that between 1 million and 5 million persons will have to produce that additional evidence.
The estimated cost of developing and processing the form, close to $100 million, infuriated activists who saw the application as an unnecessary roadblock. While advocates claim it could discourage some lower-income Americans who need the relief, the form is intended to help exclude the roughly 5% of borrowers who exceed the income limitations.
If someone does get in touch with you regarding your application, it's probably going to be about one of the following:
- Income documentation
- Status as a dependant: If you were a dependent between July 1, 2021, and June 30, 2022, you might have to provide proof of your parent's income.
- Based on the identifying information on your application, it is not possible to access your loan records.
Student Loan Legal Process Still Ongoing
Your loan servicer will handle your debt relief after your application is accepted, and they'll let you know about your new balance and any changes to your monthly payments if you still owe money. Borrowers who had an adjusted gross income (AGI) of less than $125,000 or a household AGI of less than $250,000 in 2020 or 2021 are eligible to have up to $20,000 of their qualified student loan debt forgiven, or up to $10,000 if they did not get a Pell Grant.
Loans taken out before June 30, 2022, are the only ones eligible for this debt relief. After July 1, 2022, any loan sums that have accumulated are not exempt from relief. There are no future intentions to offer widespread forgiveness as part of this one-time scheme, according to Forbes.
Even as it battles an increasing number of court challenges, the Biden administration is moving forward with debt forgiveness. The idea is being challenged in court by six Republican-led states because they believe it exceeds Biden's power and will result in losses for the companies hired to manage federal student loans and collect interest.
The states are currently debating their request for an injunction to stop the plan with a federal judge in St. Louis. The Education Department has stated in court documents that no debt cancellation will be completed before October 23.
Although Biden noted on Monday that legal proceedings are still ongoing, he said that his administration is confident that the program will ultimately be unaffected, ABC News reported.
