What You Need to Know to Get Student-Loan Forgiveness

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Also Read :  Earn More Than $125,000? You May Still Be Able to Qualify for Student-Loan Forgiveness

Welcome to Personal Finance Insider, a bi-weekly newsletter connecting you to the stories, strategies and tips you need to start managing money better.

college graduate

Apply for student loan forgiveness as soon as possible.

Spencer Platt/Getty

Here’s what: The student loan forgiveness application is live

After court proceedings, beta testing, and much hand-wringing, the Biden administration’s student loan forgiveness motion is live and available to federal borrowers. $10,000 to $20,000 in forgiveness is on the horizon for millions of Americans.

So what happens now? You should complete the application as soon as possible if:

  • You have student loans that were paid on or before June 30, 2022
  • Your loans are owned by the federal government (check this list to see if your loans qualify)
  • And you’ll make $125,000 or less a year or $250,000 a year for couples if you’re married and filing your taxes jointly with your spouse

You can apply until December 31, 2023. If you have already completed the application in beta mode, you do not need to reapply. You will receive an email when your application has been approved.

There are a few things you should know

Initially, several lawsuits are pending against the Biden administration. A few have already been kicked out, but there’s a chance others will cause significant delays or delays in Biden’s plan.

However, the Biden administration has advised borrowers to apply as soon as possible — ideally before mid-November (i.e., next month) to have $10,000 worth of loans forgiven (or $20,000 if you’re receiving a Pell grant). have) before student loan payments resume January 2023.

In addition, no one knows exactly how this process will go. The idea is that borrowers apply and are approved fairly quickly, and then student loan administrators apply the waiver directly to individuals’ accounts. You should receive an email when the change is made. However, with so many agencies and actors involved, there can be bumps.

All of this to say: student loan forgiveness is complicated, and chances are it will remain complicated for a while. A Wisconsin judge, for example, who dismissed one of the lawsuits filed against the plan, said that despite his ruling, Biden’s plan could still be found to be overkill and a future administration could reverse the forgiveness.

So apply and keep an eye on the news. And don’t fall for the scams — there’s only one way to apply, and that’s through the State Student Aid website.

And if $10,000-$20,000 in forgiveness doesn’t wipe out your balance, make a plan to start paying again in January.

— Stephanie Hallett, Editor-in-Chief of Personal Finance Insider

Learn more about student loan forgiveness

How to complete the Student Loan Forgiveness Application

Here’s what to expect from the application and what information you need to have on hand to complete it.

Biden’s student loan forgiveness plan could reduce my monthly payment from $370 to $150. Here’s exactly how I did the math.

Insider reporter Leo Aquino’s current federal student loan balance is $35,590 with an interest rate of 5%. A financial planner helped them figure out what forgiveness could mean for their budget.

Refinancing your student loans can get you a lower interest rate, but you lose access to Biden’s forgiveness plan

The headline here: If you qualify for a waiver, don’t refinance your federal student loans now.

All your questions about applying for student loan forgiveness answered

Still have questions about forgiveness? We help you understand if your loans qualify and more.

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