The Biden administration officially launched its student loan forgiveness application on Monday, which is now available through an online portal.
Borrowers with federal student loan debt can fill out the simple application that includes questions such as the borrowers' name, Social Security number and email. They then need to confirm their eligibility for student debt relief before submitting the form to be considered for up to $20,000 in debt forgiveness.
Borrowers have until Dec. 31, 2023, to apply for federal student debt forgiveness.
"As millions of people fill out the application, we’re going to make sure the system continues to work as smoothly as possible so that we can deliver student loan relief for millions of Americans as quickly and as efficiently as possible," President Joe Biden said.
If you have private student loans, these will not qualify for federal student loan forgiveness. But you can lower your monthly payments by refinancing to a lower interest rate. You can visit Credible to find your personalized interest rate without affecting your credit score.
40M borrowers expected to get student debt forgiveness
Back in August, Biden announced that the administration would forgive up to $10,000 in federal student loan debt per borrower and up to $20,000 for borrowers who received Pell Grants for college. Those who earned less than $125,000 per year, or $250,000 for married couples, would be eligible for forgiveness.
"In total, more than 40 million Americans can stand to benefit from this relief, and about 90% – 90% of that relief is going to go [to] people making less than $75,000 a year," Biden said.
Borrowers who apply for student loan forgiveness will need to confirm via a signature that they meet the requirements, but are not required to upload any supporting documents. The Department of Education will reach out to applicants if any additional documentation is needed.
If you have private student loans and don’t qualify for debt relief, you could consider refinancing to lower your student loan payments. Visit Credible to compare multiple student loan lenders at once and choose the one with the best interest rate for you.
What happens after borrowers apply for student loan forgiveness?
After applying for student loan forgiveness, the Department of Education could reach out for addition information to verify the applicant’s income. For those enrolled as a "dependent student" anytime between July 1, 2021, and June 30, 2022, the department may request information on the parents’ income.
The borrower’s student loan servicers will notify them of any updates, and when their debt relief has been applied. The servicer will also notify the borrower of their new monthly payment amount if they still have a student loan debt balance.
Student loan payments for federal borrowers will resume in January 2023. While announcing the student loan debt relief plan, Biden also extended the student loan payment pause through the end of the year.
If you are interested in refinancing your private student loans, you can contact Credible to speak to a student loan expert and get all of your questions answered.
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