The student loan forgiveness application is now available. Here’s what you need to know.

Published on: October 20, 2022 6:00 AM EDT|Updated on: October 20, 2022 12:56 PM EDT

Towson University campus

The online application for federal student loan forgiveness is now available, with millions of Americans eligible for relief.

In August, President Biden announced his decision to cancel up to $20,000 of debt for Pell Grant recipients who have Department of Education-held loans, and up to $10,000 for those who were not Pell Grant recipients. The relief is limited to those making less than $125,000 a year, or earning less than $250,000 as a married couple.

According to a Department of Education analysis, the typical undergraduate student with loans now graduates with nearly $25,000 in debt,” a White House fact sheet said.

Close to eight million borrowers for whom the federal education department already has income data for and whose eligibility can be verified without waiting for an application could receive relief without applying. All others will need to apply for relief.

Is there a deadline to apply?

Those who are interested in applying will need to complete and submit their application by Nov. 15. Relief can be expected within four to six weeks for qualified borrowers who have completed the application, according to the infographic.

What types of student loans qualify for forgiveness?

Any borrower who took out federally-held subsidized loans, unsubsidized loans, parent PLUS loans and graduate PLUS loans are eligible. Federal student loan relief only applies to those who have taken out loans before June 30, 2022.

Private student loans don’t qualify for forgiveness.

Are other types of loan relief available?

Yes. Beyond the broad federal debt relief plan, there are other student loan cancellation or discharge alternatives that borrowers could be eligible for, depending on occupation and circumstance. Additional types of forgiveness are offered for public service workers and teachers, if the school you are attending closes, if you become disabled or declare bankruptcy, or if the borrower dies, according to Federal Student Aid’s webpage on student loan forgiveness.

What impact would student loan forgiveness have?

The Education Writers Association published an article that examined “the fairness of forgiveness and the complexity of the student debt crisis in America.”

In the piece, Wil Del Pilar, vice president of higher education at the Education Trust, said during a panel discussion that one-third of student loan borrowers would no longer have outstanding debt if $10,000 was forgiven.

Panelist Sandy Baum, a senior fellow at the Urban Institute and professor emerita of economics at Skidmore College, had questioned whether a system in which people continue borrowing following loan forgiveness was viable.

Baum also asserted that while loans help provide access to education, she questioned whether it was fair to give money to people to pay off student loans while leaving out others without loans who might need the money.

Several states are hoping to be able to collect tax on the amounts that are forgiven from borrowers.

How do I properly prepare for the application’s opening?

Once a borrower determines which debt relief they would like to apply for, they should:

  • Know the eligibility requirements for relief.
  • Ensure their loan servicer providers have your up-to-date contact information for communication purposes. Service loan providers can found by logging into the the federal StudentAid.gov website.
  • Locate their 2020 or 2021 tax returns and loan records
  • You can sign up for loan forgiveness updates through the Department of Education’s website.

When will the loan repayment pause end?

On Dec. 31, the final extension of the loan repayment pause will end. Borrowers will resume their payments in January 2023.

There are nine federal loan providers that collect and keep track of debt payments on behalf of the federal government. The providers are: Aidvantage (formerly Navient), EdFinancial Services, FedLoan Servicing, Great Lakes, MOHELA, Nelnet, OSLA, ECSI and Default Resolution Group (for the deaf or hard of hearing).