October 15, 2022
The U.S. Department of Education released a beta version of the student debt relief application on Friday evening.
The application is being tested for bugs and performance issues. However, applications submitted during the testing phase will be processed after the official launch later in October until the application closes in December 2023.
"We've worked really hard to make this application simple and straightforward. We kept the number of questions to a minimum and designed it in collaboration with user testing," a briefing for the application said. "Borrowers will not need to log in with their FSA ID. They will not need to upload documents. The application will be available on both computers and mobile devices. It will be available in both English and Spanish and, of course, accessible to people with disabilities."
Borrowers who received federal pell grants and made less than $125,000 a year based on their most recent tax return information may be eligible for up to $20,000 in student loan debt forgiveness. Those who did not receive pell grants but meet the income requirement can have up to $10,000 in loan debt wiped out.
Borrowers interested in filling out a debt relief application will be asked to fill out personal information, including their first and last names, social security number, date of birth, and email address.
Applicants must also agree to provide proof of income by March 31, 2024, or risk their application not being processed. You also have to confirm that either you made less than $125,000 as a single tax filer or as a joint income tax filer with a spouse, or as the head of your household, the total amount earned was less than $250,000.
Student loan borrowers eligible for student loan forgiveness must have received federal loans to qualify. Private loans are not eligible to be forgiven. Also, federal PLUS loans given to students in graduate school are eligible for forgiveness.
After you complete the application, you don't have to do anything unless you hear back from the U.S. Department of Education. If you successfully filed taxes, that information can be accessed without you submitting documents.
If there is a need for more information, it will most likely be supplemental income verification or your parents' income because you were a dependent from July 1, 2021, and June 30, 2022.
The U.S. Department of Education will update you when your application has been approved and sent to your loan service provider.
Once the application is officially live, the loans should be forgiven within weeks, the goal is to have applications processed by January when the hold on student loan repayments ends after being frozen since the onset of the COVID-19 pandemic.
President Joe Biden announced a plan to forgive up to $20,000 in student debt for eligible borrowers in August, after pledging to eliminate the debt while campaigning for the presidency in 2020.
Based on the American Rescue Plan, there will be no tax consequences on any student loan debt that is forgiven until 2026.
The entire loan forgiveness plan is estimated to cost $365 billion.
People who signed up for updates on the application process once it was announced this summer will receive emails once the application is formally launched. It will also be posted on various social media channels.
