How to apply for student loan forgiveness

Note: This article will be updated when the application becomes available in early October.

The Biden administration proposed to cancel all undergraduate federal student debt on the campaign trail in 2020. Now, in October 2022, it has partly delivered on that promise.

Around 40 million Americans with middle-to-lower income are eligible to have up to $20,000 worth of federal student loan debt cancelled, according to the Biden-Harris Student Debt Relief plan. For an estimated 20 million people, that will clear the entirety of their debt. Most people eligible for loan forgiveness make $75,000 or less per year.

Here’s a breakdown of how the loan forgiveness program works and how to apply for it.

Student loan debt reached $1.6 trillion in 2022, more than 90% being federal student loan debt. Since March 13, 2020, all federal student loan repayments have been on hold, and with payments set to resume in 2023, the Biden administration hopes to offset some of the financial burden for borrowers when payments start up again.

According to the plan, federal student loan borrowers will see a one-time cancellation of up to $10,000 or $20,000 worth of student loan debt, depending on their eligibility. The plan also strengthens protections for borrowers and improves the income-driven repayment plans for federal student loans.

Any person who has federal student loan debt, and in 2020 or 2021, made less than $125,000 per year, or households that made less than $250,000 per year, are eligible for student loan debt forgiveness. The federal student loans also need to have been disbursed to you before July 1, 2022.

Borrowers who have Perkins loans or Federal Family Education Loans (FFEL) not held by the Department of Education — meaning loans that are issued and managed by private banks but are guaranteed/fiscally covered by the government — are not eligible for the one-time debt cancellation, unless they have been consolidated into federal Direct Loans before Sept. 29, 2022.

If you did receive a Pell Grant in college and meet income requirements, you can have up to $20,000 of federal student loan debt cancelled. You can see if you received a Pell Grant on your studentaid.gov account dashboard.

If you did not receive a Pell Grant in college and meet income requirements, you can have up to $10,000 of federal student loan debt cancelled.

Current students are eligible for debt relief as long as the loans were issued before July 1, 2022. Borrowers who are financially dependent on their parents can apply using their parents income information.

That means the loan forgiveness is capped at however much you actually owe in student loan debt. If you are eligible for $20,000 in loan forgiveness, but only have $12,000 in student loan debt — only $12,000 will be forgiven. You wouldn’t receive the other $8,000.

It’s a simple form that you’ll have until Dec. 31, 2023, to submit.

Some borrowers will receive this debt relief automatically since the federal government already has income data for 8 million borrowers. You will receive an email if that is the case. For everyone else, you apply online (a paper version of the form will be available at a later date).

Keep an eye on studentaid.gov, as that will most likely be where you will apply for the one-time student loan debt forgiveness. But, also be sure to check with your loan servicer about loan repayment and the process for applying for forgiveness. Update your contact information on both accounts if it’s not already up to date.

The application will be available in early October 2022, and you will have until Dec. 31, 2023, to submit it. However, if you want the debt relief applied to your loans before repayments start back up in January, you need to submit your application before Nov. 15, 2022.

You can subscribe to the Department of Education’s newsletter to be notified when the application officially becomes available. For more information, visit the Department of Education’s FAQ.

Once you submit your application, you will see a webpage displaying a confirmation receipt, and you will receive an email confirming your application has been submitted.

You can call 833-932-3439 for help (once the application is available).

Your federal loan servicer should notify you once the debt has been cancelled from your account, with details on how the debt relief was applied.

The Philadelphia Inquirer is one of more than 20 news organizations producing Broke in Philly, a collaborative reporting project on solutions to poverty and the city’s push toward economic justice. See all of our reporting at brokeinphilly.org.