More than 40 million Americans could see at least some of their student loan debt paid off in the coming weeks. But there are important dates to know in order to take advantage of the White House plan.
The basics
Pell Grant recipients can receive up to $20,000 in loan forgiveness; Federal loanholders can receive up to $10,000 in forgiveness. To be eligible, individuals must have an adjusted gross income (AGI) of less than $125,000 for 2020 or 2021, or $250,000 for combined household income.
READ MORE: 588,000 eligible for debt relief for Alabama students, White House estimates
dates to know
October
About 8 million borrowers will be eligible for automatic student aid because their data is already available to the Department of Education. The remaining 35 borrowers must complete an application.
The exact date the application will be released has not been revealed by the DOE, which expects it “by early October.” It will be online first, but a paper version will be released later.
You can register to be notified when the application is available by filling out this form.
There is another important date in October.
Borrowers who are employed by nonprofit organizations, the military, or federal, state, tribal, or local governments may be eligible to have all of their student loans forgiven through the Enhanced Public Service Loan Forgiveness program. The temporary change to this program will expire on October 31st. Visit PSLF.gov for more information on eligibility and requirements.
15th of November
Student loan payments and interest accrual have been suspended since March 2020. The payment pause is scheduled to end in January 2023, and applicants seeking relief must complete their application before November 15 to meet that deadline.
Borrowers can expect the waiver to be applied to their balance within 4-6 weeks of submitting their application.
Loan forgiveness is limited to the amount owed. For example, if you are eligible for $20,000 in debt forgiveness but have $15,000 in outstanding balance, you will only receive $15,000 in forgiveness.
READ MORE: Student loan decree: Alabama Gov. Kay Ivey and 21 other governors write letter opposing Biden plan
January 1, 2023
The loan forgiveness is applied to the borrower’s outstanding balance. Even after the waiver, around 23 million borrowers will still owe money, and from January 1, 2023, interest on these loans will start accruing again and regular payments will be required.
The payments pause has been extended several times since it was first introduced at the beginning of the COVID pandemic, but the White House has said it will not be extended again.
December 31, 2023
That’s the deadline to apply for the one-time student loan forgiveness under the Biden plan.
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