One-Time Student Loan Debt Relief Application Process and Eligibility

The one-time student loan debt relief application process is a game-changer for many borrowers. To be eligible, you must have federal student loans that were disbursed before July 1, 2022, and you must have been in repayment on those loans as of June 30, 2022.

To qualify, your annual income must be below $125,000 for individuals or $250,000 for married couples filing jointly. This income threshold will be used to determine your eligibility for debt relief.

The application process is relatively straightforward, but you'll need to provide some personal and financial information to confirm your eligibility.

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Eligibility for one-time student loan debt relief is based on income and loan type. To qualify, your income must be below $125,000 for individuals or $250,000 for married couples and heads of households for either the 2020 or 2021 tax year.

You can check if you're eligible by looking at the income thresholds, which are set as "cliff" thresholds, meaning earning even a little too much can make you entirely ineligible for forgiveness. This means if you earned $75,000 in 2020 or 21 but only have $7,000 in federal student loan debt, you'll only receive $7,000 in forgiveness.

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The U.S. Department of Education has a list of eligible loan types, including William D. Ford Federal Direct Loans, Federal Family Education Loans owned by the Education Department, and Federal Perkins Loans owned by the Education Department. Consolidation loans are also eligible if the loans consolidated were owned by the Education Department, as long as they were consolidated before September 29, 2022.

Here are the eligible loan types:

You can apply for debt relief through the StudentAid.gov website. The application is a one-page form that you'll need to complete accurately and submit by December 31, 2023.

So, are you eligible for Biden's student loan forgiveness plan? Well, let's break it down. You're eligible if you have Federal Direct student loans, and your income is below $125,000 if you're single or $250,000 if you're married or a head of household for either the 2020 or 2021 tax year.

But here's the thing: commercially-held FFEL program loans and Perkins Loans are not eligible. And if you have private student loan debt, forget about it - that's not part of this plan either.

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Now, let's talk about what types of loans are eligible. According to the list below, the following loans qualify for forgiveness:

You'll also want to know that defaulted loans are still eligible, even if you're behind on payments. And if you've consolidated your loans, that's okay too - as long as the original loans were owned by the Education Department.

One more thing: if you made voluntary payments during the Covid-19 payment pause, you might be eligible to have those payments refunded. So, it's worth checking in with your loan servicer to see if you qualify.

Private student loans are not eligible for debt relief. Sorry, but this debt relief is only for federal student loans.

Private loans are a whole different ball game when it comes to forgiveness. If you've consolidated a federal student loan into a private loan, that consolidated loan isn't eligible either.

So, if you're looking to wipe out some debt, make sure you're dealing with federal student loans.

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The application process for one-time student loan debt relief is relatively straightforward. You can start by heading to StudentAid.gov/Debt-Relief/ and selecting "Apply For Student Loan Debt Relief During Beta Launch".

You'll need to enter your personal information, including your name, Social Security number, birthday, phone number, and email address. This information is required to verify your identity and ensure that you're eligible for the program.

Most borrowers will need to apply, but nearly 8 million borrowers may get forgiveness automatically if the Department of Education already has their income data on file. You can check if you're one of them, but it's always better to be safe than sorry.

To apply, follow these steps:

Once you've submitted your application, it will be processed, and you won't need to resubmit. Most borrowers will see their eligible student loan debt fall off their accounts in around six weeks.

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The program details are pretty straightforward, but let's break them down to make sure you're on the right track.

You can get up to $10,000 of federal student loan debt forgiven, as long as you make less than $125,000 a year (or $250,000 for married couples).

The application is available in both English and Spanish, which is a big help for those who may need it.

You have until December 31, 2023, to apply, so mark your calendars and don't miss the deadline.

Parents with Parent PLUS Loans or their own student loans need to apply separately from their child, so make sure to get that taken care of.

The Education Department should already have a record of your Pell Grant, so you won't need to dig up proof.

You don't need to provide any documents to apply, but you may be asked to show proof of income when your application is being reviewed.

Here are the income limits to keep in mind:

If you submit an application, it will be processed, and you won't need to resubmit.

The U.S. Department of Education is actively encouraging all eligible borrowers to apply, regardless of whether they think their data is already on file. This shows they're committed to making the process as smooth as possible.

You won't be taxed on the federal level for student loan forgiveness. Some states, however, might have different rules.

You'll need to check how your state handles student loan forgiveness, as it's not a one-size-fits-all situation.

If you'll still have some student loan debt left over after your forgiveness application is approved, don't worry, you're not alone. Many people will still have some debt remaining.

You'll need to make a plan to pay off the remaining balance. This might mean continuing to make regular payments or adjusting your payment schedule.

You can't refinance or consolidate your remaining student loan debt after March 13, 2020, to get a better interest rate or lower monthly payments. This is a one-time forgiveness offer, not a loan modification.

You'll need to contact your loan servicer to discuss your options for paying off the remaining balance. They can help you set up a payment plan or answer any questions you have.

If you're struggling to make payments, you might be eligible for income-driven repayment plans or other forms of assistance.

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