If you’re one of the nearly 45 million Americans with student loan debt, the news that the Biden Administration will be forgiving student loan debt for some borrowers likely led to one simple question: How do I apply?
First, you’ll want to make sure that you qualify for this student debt relief. According to U.S. Department of Education data, an estimated 27 million borrowers will qualify for up to $20,000 in debt relief under this plan, which is designed to aid low- to middle-income families.
Do I Qualify For Student Loan Debt Forgiveness?
To qualify, you must have an individual income less than $125,000, or under $250,000 for households, according to the Federal Student Aid program.
If you qualify, the amount you receive in debt relief will depend upon whether you received a Pell Grant. The U.S. Department of Education will provide up to $20,000 in debt cancellation to Pell Grant recipients that have loans held by the Department of Education. Non-Pell Grant recipients are eligible for up to up to $10,000 in debt cancellation. If you aren’t sure if you received a Pell Grant, you can check by logging into your Free Application for Federal Student Aid (FAFSA) account.
The loan forgiveness program does not apply to private student loan borrowers.
Some borrowers who are employed by nonprofits, the military, or federal, state, Tribal or local government may be eligible to have all of their student loans forgiven through the Public Service Loan Forgiveness program.
If you qualify, your relief will be capped at the amount of debt you have. For example, if you’re eligible for up to $20,000 but only have $15,000 in debt, you will only receive $15,000.
The Federal Student Aid program has more details on the plan here.
How To Apply For Student Loan Debt Forgiveness
Applications are not open yet, but the Department of Education will be providing the application to apply for loan forgiveness before the pause on federal student loan repayments ends on Dec. 31.
To be notified when the application process begins, you can visit the Department of Education subscription page. Simply enter your email and check the box that says “Federal Student Loan Borrower Updates” and you’ll receive an email when it’s time to apply.
When the application opens, it will explain the next steps you’ll need to take. Because the forgiveness plan is based on income as well as your existing student loans, you’ll likely need to gather documents that prove your household income to apply.