How do I know if my student loans will be forgiven?
While campaigning ahead of the 2020 presidential election, President Joe Biden pledged to forgive $10,000 in student loan debt per borrower.
See: Will student loan forgiveness include Parent Plus loans?
Find: How do I apply for federal student loan forgiveness?
Now, more than a year and a half after being sworn in, Biden is trying to keep his campaign promise, announcing that his administration will forgive up to $10,000 in federal student loan debt (or up to $20,000 in student loan debt). federal student). debt for Pell Grant recipients).
According to a White House statement on the matter, approximately 45 million Americans hold student loans totaling $1.6 trillion. About 20 million borrowers could see their debt completely eliminated, according to the Washington Post.
Federal student loan payment break extended to end of year
As expected, President Biden has also officially extended the moratorium on student loan payments until December 31, but this will be the last extension. Federal student loan repayments will resume on January 1, 2023.
According to the Washington Post, the Department of Education has income details for nearly 8 million borrowers who may not need to take further steps to reduce their student debt. But for the rest of those people trying to figure out if they qualify for their student loan forgiveness, there has been very little information about what applying for debt relief will look like.
The White House fact sheet reads: ‘The Department of Education will work quickly and efficiently to put in place a simple application process for borrowers to apply for relief. The app will be available no later than when the pause on federal student loan repayments ends at the end of the year.
Student Loan Forgiveness Information Still in Limbo
But as Michelle Dimino – senior education policy manager, Third Way – told CNBC’s “Make It”: “Most borrowers won’t automatically have their balances wiped out or reduced…we expect all more information.”
While you wait for more details and instructions on how to apply, there are things a borrower can do to prepare for the application process.
As CNBC suggests, the first thing to do is check your income — according to your 2020 and 2021 tax returns — and make sure you meet the income eligibility threshold. Only those earning less than $125,000 a year (or $250,000 for a married couple filing taxes jointly) can apply for federal student loan forgiveness.
Second, Pell Grant recipients can access relevant records by logging into your Free Federal Student Aid Application (FAFSA) account.
CNBC is also advising all borrowers to sign up for federal student loan updates through the US Department of Education. By doing so, borrowers will be notified when new information becomes available.
Additionally, those eligible for loan forgiveness should maintain their FAFSA profile information and have their loan documents and tax returns for the past two years on hand to prove their eligibility.
White House promises easier registration in 2023
Going forward, the Department of Education will make it easier for borrowers who enroll in this new plan to stay enrolled, according to the White House fact sheet. “Starting in the summer of 2023, borrowers will be able to authorize the Department of Education to automatically pull their income information year after year, avoiding the hassle of having to recertify their income each year,” the datasheet says. ‘information.
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In the meantime, expect news from the Biden administration — and the U.S. Department of Education — on how to seek student debt reduction in the near future.
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