Student Loan Relief Sign Up Officially Launches

Topline

The Department of Education on Monday officially launched the application process for its long-awaited one-time federal student debt forgiveness program—and many borrowers eligible to apply could see relief within six weeks, according to the Department of Education.

Student loan borrowers gather near The White House to tell President Biden to cancel student debt.

Getty Images for We, The 45 Million

Key Facts

Individuals who make less than $125,000 a year (or $250,000 per household) are eligible for up to $10,000 in loan forgiveness, while Pell Grant recipients, which are typically awarded to low-income students, are eligible for up to $20,000 in forgiveness.

Borrowers can log onto StudentAid.gov to fill out a form to apply for loan forgiveness any time before December 31, 2023, with no documentation or Federal Student Aid ID required to sign up (a paper version will be available at a later date).

About 8 million borrowers for whom the federal government already has income data will receive debt relief automatically and will be alerted via email.

Borrowers who are hoping to have loans forgiven before the federal student loan repayment pause ends in January need to submit applications before November 15, 2022, according to the Department of Education.

Those who have worked in public service for 10 years or more, such as for a non-profit organization or the government, may be eligible to have all debt canceled through the Public Service Loan Forgiveness program, with applications open now and due before October 31 2022, according to the White House, which offers a tool to determine eligibility.

The official launch of the student debt forgiveness application comes after the Department of Education launched a “beta period” that gave borrowers access to the site over the weekend, during which eight million Americans filled out applications, President Joe Biden said Monday in announcing the site’s launch.

Tangent

Those with privately held federal loans borrowed through the Federal Family Education Loan (FFEL) program are no longer able to receive one-time loan forgiveness, the agency said last month. Borrowers who have already consolidated loans into direct loans held by the Education Department before September 29 will remain eligible, the Department of Education said, adding it was looking for “alternative pathways” to include the remaining borrowers in debt forgiveness.

Big Number

About 40 million. That’s how many people are eligible for some student debt relief, with as many as 20 million people expected to have all loans forgiven, according to the White House.

Key Background

President Joe Biden announced a highly anticipated one-time student loan forgiveness plan in August after months of pressure from progressive Democrats to take action on the issue. Biden pledged on the campaign trail to forgive all federal student debt for many students earning under $125,000, though the White House has contended its compromise plan will still provide significant “breathing room” as borrowers begin to make loan payments again after the coronavirus-induced economic crisis. Biden at the time also announced that a pause on federal student loan repayments would be extended one last time through December 31, 2022. Some 45 million borrowers hold about $1.6 trillion in federal student loan debt, according to the White House, and roughly two-thirds of bachelor’s degree recipients take out federal student loans, according to data from the Department of Education.

Surprising Fact

Biden’s plan is estimated to cost $400 billion, according to an estimate from the Congressional Budget Office.

Contra

The Biden administration is facing several legal challenges to its student debt relief program, including a lawsuit from a conservative Indiana lawyer, who asked the government to block the policy, as well as a group of six GOP-led states that filed a federal suit arguing the administration does not have the executive authority to cancel the loans. The plan has sparked backlash from several Republicans who have argued it’s too expensive and unfair for those who have already paid their loans.

Student Loan Relief Sign Up Officially Launches—Here’s How To Apply