How to apply for beta launch of Biden’s one-time student loan forgiveness program
By now you’ve heard all about President Biden’s student loan forgiveness plan. Alternatively, this plan is intended to forgive up to $10,000 in federal student loan debt for eligible borrowers, or up to $20,000 in debt for students who have used Pell Grants to attend school. Income limits also apply, and it was recently reported that certain types of federal student loans (i.e. Perkins loans and FFEL loans) are not included in this relief.
Even though several lawsuits have threatened the implementation of this program, the beta version of the application to apply for Biden’s unique student loan forgiveness program has just gone live.
Read on to find out how to claim up to $20,000 in eligible federal student loan forgiveness, as well as steps you can take to ensure you submit all federally required information.
How to Apply for Biden’s Unique Student Loan Forgiveness Program
First, it’s worth noting that the US Department of Education claims that nearly 8 million borrowers can get this discount automatically (without applying) provided they don’t opt out. This is because the government already has the relevant income data required to qualify.
That said, those unsure if the Department of Education has their data should apply, and the Ministry of Education actively encourages all eligible borrowers to apply, regardless of.
Even though the Student Loan Forgiveness Application is still in beta, the application clearly states that “if you submit an application, it will be processed and you will not need to submit it again.”
5 Steps to Apply for $10,000 to $20,000 in Student Loan Forgiveness Beta Launch
The U.S. Department of Education has set a deadline of December 31, 2023 for applications for this plan. However, borrowers should definitely apply as soon as they can, especially since those who apply early may see their loan forgiveness kick in before federal student loan payments resume in January 2023.
Now that the details are known and we know what it takes to submit an application, here are the steps you will need to follow to receive assistance.
To note: This is a one page application, but read the instructions carefully and be sure to complete it completely and accurately.
- Step 1: Head toward StudentAid.gov/Debt-Relief/ and select “Request Student Loan Debt Relief During Beta Launch”
- 2nd step: Enter your personal information (name, social security number, birthday, phone and email address)
- Step 3: Review and confirm that you meet the income and other requirements for the correct tax years (2020 or 2021)
- Step 4: Enter your name again as a signature
- Step 5: Check the box that the information you provide is correct under penalty of perjury
After filling out the form, just hit submit at the bottom.
Once the application is submitted, the US Department of Education says most borrowers will see their eligible student loan debt disappear from their accounts in about six weeks.
Some borrowers may need to provide income verification
According to the Ministry of Education, between 1 million and 5 million borrowers will be required to provide verification of income.
If you are selected to verify your income, after clicking submit, a secondary form called “Student Debt Relief Income Verification” will appear and you will be prompted to log in with your FSA ID.
Once logged in, you will be asked to download one of the following:
- A copy of your 2020 or 2021 IRS Form 1040
- A copy of your 2020 or 2021 IRS tax return transcript
- IRS Verification of 2020 or 2021 Letter of No Filing
It is estimated that the verification of income will take more than 30 minutes for borrowers.
Who is eligible for Biden’s Student Loan Forgiveness Plan?
Direct federal student loans are eligible for up to $10,000 in forgiveness (or up to $20,000 in forgiveness for Pell Grant recipients) provided the borrower’s income is below certain thresholds for tax year 2020 or 2021.
However, Federal Family Education Loan (FFEL) commercial loans and Perkins loans are not eligible for relief. Also note that private student loan debt is not eligible for this program.
Specifically, these income thresholds are set at $125,000 for individuals and $250,000 for married couples and heads of households. Also be aware that these income thresholds appear to be “cliff edge” thresholds, so earning even a little too much both years can make you totally ineligible for forgiveness.
It’s also worth noting that the relief is for “up to $10,000” or “up to $20,000,” but some borrowers who easily meet the income thresholds won’t receive as much relief. This is because the forgiveness is capped at the actual amount of debt you have. In other words, someone who made $75,000 in 2020 or 21 but only has $7,000 in federal student debt will only get $7,000 back.
If you made voluntary payments during the Covid-19 payment pause, you are entitled to reimbursement of those student loan payments. Although some repayments may be automatic, if you are unsure or have fully repaid your loans, you should call your loan servicer to have this processed. Learn more about how to get a refund of your student loan payments here.
If you think you might be eligible for federal student loan relief, it makes sense to apply as soon as possible. After all, the US Department of Education is notorious for moving at a snail’s pace, and there will be millions of applicants applying for this relief at the same time.
Your best decision now is to figure out exactly what you need to know to apply and submit all the required information as soon as possible. Fortunately, the Department for Education says most borrowers won’t need to upload documents or have an FSA ID to apply for relief.