Federal Student Loan Borrowers Need to Apply for Student Loan Debt Forgiveness once it becomes available
President Joe Biden announced his plan to cancel up to $10,000 in federal student debt per borrower and up to $20,000 for Pell Grant recipients. Individuals earning less than $125,000 per year and married couples or heads of households earning less than $250,000 per year are eligible for debt cancellation.
Now, student loan borrowers enter into the phrase which is waiting period. Personal finance consultants believe borrowers should see a difference in their loan balance by the end of the year. Higher education expert Mark Kantrowitz agrees, adding that it will probably take one or two months for the U.S. Department of Education and student loan servicers to implement loan forgiveness.
If I qualify for student forgiveness what is my next step?
Nearly 8 million borrowers may be eligible to receive relief automatically because relevant income data is already available to the U.S. Department of Education.
If the U.S. Department of Education doesn't have your income data, the Administration will launch a simple application which will be available by early October.
In most cases, you have to allow appropriate processing time after submitting the form. At this time there is no detailed information on whether or not the form is very complex the form may be. Per the Federal Student Aid website, the form will be available by early October. It also added relief can be expected within four to six weeks of completing the application; even though the form will be available in October. The website advises to apply before Nov. 15, 2022, to see your loans forgiven by the end of this year.
When will student loan forgiveness applications stop being processed?
Borrowers are advised to apply as soon as possible. The preferred date is before November 15th to receive relief before the payment pause expires on December 31, 2022.
The Department of Education commits to process applications as they are received, even after the pause expires on December 31, 2022.
Will we get an email when the application will be available?
If you are interested in being notified when the application is open, please sign up at the Department of Education subscription page.