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How to prepare for student loan forgiveness application

Student Loan Forgiveness Explainer
Posted at 8:55 AM, Oct 03, 2022

COLORADO — Federal student loan debt forgiveness applications are expected to come out any day and experts say being prepared to apply is key to receiving relief in a timely manner.

Around 43 million student loan borrowers are getting ready to apply for relief while around 20 million of those people are expected to have their entire balance wiped out, according to the White House.

Who qualifies?

Independents earning $125,000 or less in 2020 or 2021 can receive up to $10,000 in relief. Those with pell grants, which are given to students with higher financial needs, can clear up to $20,000 off student loan debt.

Those with private loans are not eligible for federal forgiveness. The Biden Administration recently made changes to eligibility requirements for relief, now saying borrowers with federal student loans not held by the Department of Education can not consolidate them to qualify for debt forgiveness.

Do I need to fill out an application to get relief?

The majority of borrowers will need to fill out an application to get relief. However, around 8 million people who have submitted income tax data for 2020 or 2021 will get automatic forgiveness.

The government uses data from FAFSA and income-driven student loan repayment plans to certify income, meaning they might not have to send in an application.

When can I apply for forgiveness?

The application for federal loan forgiveness has not been released yet, but the White House says it will come out in early October.

Officials say once the application is out make sure you apply by mid-November to receive relief before student loan payments start back up in January.

Federal student loan payments were put on hold beginning in March 2020 due to the pandemic.

How can I prepare to apply?

  • Experts say you can prepare to apply for forgiveness by making sure you know the eligibility requirements for relief. You should make sure your loan servicer has your up-to-date contact information so they can easily reach you during the process if needed. You can find your servicer by logging into your Federal Student Aid account.
  • If you have questions, you can easily phone an accountant to clear up any confusion and receive answers to your specific situation.
  • Make sure you have your tax returns and loan records available now so you don't have to find them later.
  • You can sign up for loan forgiveness updates through the Department of Education's website.

The White House said the application window will remain open through Dec. 31, 2023. Federal student loan relief only applies to those that have taken out loans before June 30, 2022.

The Federal Student Aid website mentions it could take up to six weeks for borrowers to see debt relief after submitting an application.

The Department of Education says it could take around eight weeks for borrowers to see debt relief.
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