President Biden unveiled an unprecedented student loan forgiveness plan last week. The initiative, implemented through executive action, will provide up to $20,000 in federal student loan cancellation for up to 20 million borrowers, many of whom will receive the relief automatically.
When the plan was first announced, some key details remained unclear. But the Education Department has since provided additional insights as borrowers look to apply for relief. Here’s the latest.
Biden’s Student Loan Forgiveness Application Process
The Education Department has indicated that around 8 million borrowers who already have their income information on file with the Department will be eligible for automatic student loan forgiveness. Most of these borrowers will have submitted their income data as part of a recent application for an income-driven repayment plan. Under Biden’s initiative, borrowers must earn less than $125,000 per year (or $250,000 if married) to be eligible for loan forgiveness.
But most borrowers will have to submit an application to apply for Biden’s student loan forgiveness. On Friday, top Education Department officials indicated that an official student loan forgiveness application for the program will be made available by early October. After a borrower submits the application, the Department expects to provide the relief within four to six weeks. Officials are encouraging borrowers to submit their application by November 15, 2022 to receive loan forgiveness prior to the student loan pause ending in December. However, applications received after this date will still be processed on a rolling basis.
“[The Education Department] has a plan to make sure student loan forgiveness is as easy as 1,2,3,” said Education Secretary Miguel Cardona in a tweet on Friday explaining the process.
Borrowers can sign up here to get a notification when the student loan forgiveness application is ready.
FFEL Program Loans May Be Eligible for Biden’s Student Loan Forgiveness
In its initial announcement, the Education Department indicated that only “loans held by the Department of Education” would qualify for student loan forgiveness. That suggested that borrowers with commercially-held FFEL-program loans (an older federal student loan program where the government guaranteed privately-issued loans) may be excluded.
The Department has since suggested that FFEL loans may qualify if consolidated into a federal Direct consolidation loan, as reported by the New York Times. However, the Department of Education has not yet issued official written guidance to confirm this, and exact details — including whether there is a specific deadline for FFEL borrowers to consolidate — remain unclear.
Biden’s Student Loan Forgiveness Plan Is a One-Time Opportunity
Education Department officials confirmed on Friday that the Biden student loan forgiveness initiative is a one-time opportunity, so borrower’s should not expect this to happen again.
Details on the Biden student loan forgiveness initiative can be found here.
Further Student Loan Reading
How To Get Up To $20,000 In Student Loan Forgiveness Under Biden’s New Plan
Biden Announces Historic Student Loan Forgiveness Of Up To $20,000 And Extension Of Student Loan Pause: Key Details
Who Qualifies For Nearly $4 Billion In Automatic Student Loan Forgiveness Under New Biden Initiative
If You Went To These Schools, You May Qualify For Student Loan Forgiveness: Here’s What To Do
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