Apply Now: Application Now Open for Student Loan Debt Relief – NerdWallet

Not everyone needs to apply for student loan cancellation. About 8 million federal borrowers automatically receive relief because they are enrolled in income-driven repayment plans. Their income information is registered with the Ministry of Education.

All other eligible borrowers must submit an application to see their balance reduced by up to $20,000. At his Oct. 21 press conference, the White House said more than 22 million borrowers had submitted applications since it opened a week ago.

You do not need to upload proof of income to apply, but you will eventually need to do so.

When do student loan cancellation applications start?

Here are some other dates to keep in mind as the application becomes available.

  • Oct. 23: The Biden administration says it expects no bailout by this date.

  • Mid-November: The date you need to submit your application if you want to be sure you get relief before payments resume in January.

  • January 1, 2023: Federal student loan payments will resume.

  • December 31, 2023: Deadline for applying for student loan debt relief.

  • March 31, 2024: Deadline for submitting proof of income.

What do I need to do to apply for student loan cancellation?

A preview of the Student Debt Relief Application provided by the Department of Education shows that borrowers must provide:

• social security number.

You must also make sure that you submit proof of income to the Education Department by March 31, 2024. You must also agree to certify under penalty of perjury that all information submitted is true.

When submitting proof of income, you must include one of the following:

• 2020 or 2021 IRS Form 1040 (tax return).

• If you haven’t filed taxes: 2020 or 2021 IRS non-return verification.

Who is Eligible for Student Loan Cancellation?

There is confusion about who is or isn’t eligible for relief. Here’s a refresher:

Who is eligible for relief up to $10,000:

  • Your 2020 or 2021 income must be less than $125,000 if you apply individually or $250,000 if you apply jointly.

  • Did not receive a Pell Grant while in college.

  • Have an Undergraduate Direct Loan; Graduate Direct Loan; Parent Plus Loan; Plus Graduate Loan;

  • Loans must be paid by June 30, 2022.

Who is eligible for relief up to $20,000:

  • The requirements above, except that you do not receive a Pell Grant.

  • Only undergraduate debt is subject to an additional $10,000 cancellation fee.

Persons Not Eligible for Relief:

  • There are private student loans.

  • Commercially hold FFELP loans. However, those who applied for debt consolidation before September 29, 2022 are eligible.

Who Receives Automatic Forgiveness of Student Debt?

Only borrowers who are already enrolled in an income-driven repayment plan are eligible for automatic relief. These borrowers will receive eligibility notices from the Education Department. Those who want to see their relief process faster can apply now.

How to Opt Out of Student Debt Relief

Persons eligible for automatic relief may choose to opt out. If you want to opt out, you must contact the servicer directly to let them know you don’t want relief, according to the education department. You must automatically opt out by If you choose to opt out now, you can still apply for relief later, as long as you apply by December 31, 2023.

Why would anyone opt out of a bailout? Well, some borrowers are against the move to write off their debt. Others may be concerned about the tax implications for individuals. There is no federal tax on relief, but some states such as Arkansas, California, Indiana, Minnesota, Mississippi, North Carolina, and Wisconsin may tax the canceled amount as income.

How will I know that a cancellation has occurred?

The education ministry said it expects to receive relief within six weeks. You will be notified through your servicer. Check the loan account with the servicer or his Studentaid.gov.

Why can’t I contact my servicer?

The education department, not the company that manages the loan, processes and handles cancellation requests.

You may have questions about the status of your canceled debt. If you call the servicer, it will be a long line. Millions of borrowers are switching servicers and making plans. Return of Future Payments, or are adjusting payments that qualify for public service loan forgiveness. whats your only option? Put it on hold or wait for notification.

What do you do when you get a call about student debt forgiveness?

Unsolicited calls received about cancellations are likely scams. fraud is rampant According to the Federal Trade Commission, since President Joe Biden announced the cancellation of the loan, no education department or servicer has called about applying for debt relief. If you have any doubts about an incoming call, hang up and contact your servicer. If you have concerns about unsolicited text messages about canceling student loans, please do not reply. Also, do not give your Financial Student Assistance ID, account number, or password to anyone.

What about all those lawsuits?

multiple challenges In recent weeks, Biden’s executive order has been issued to cancel student debt. Cancellation efforts are targeting not only state attorneys general, but also individuals and local entities assisted by law firms. Cancellation may be postponed or canceled if any challenge is determined to be viable.

The lawsuit is pending, but the Biden administration has said it won’t announce the cancellation until after Oct. 23.

Leave a Comment