***President Joe Biden’s student loan relief plan is on hold as the Supreme Court weighs in on the plan’s legality. Legal experts expect the Court to announce its decision this summer.***
Biden’s student loan cancellation program has been met with both excitement and controversy. On the one hand, millions of borrowers stand to benefit from having their loan balances reduced by at least $10,000. For Pell Grant recipients, the relief could be as high as $20,000. This is a significant financial boon for those struggling to make ends meet amidst the ongoing pandemic.
On the other, implementing the program has been met with challenges. For example, a lawsuit filed by six Republican-led states blocked the Education Department from moving forward with the debt cancellation plan that promised to wipe out nearly $400 billion in federal loans for over 40 million borrowers. This has understandably caused frustration and disappointment for people counting on this relief.
To make matters worse, the same legal challenge has also prevented those with commercially-held FFEL Loans from accessing the program altogether. This is a significant obstacle for borrowers hoping to benefit from the student debt relief program.
Furthermore, the eligibility requirements for loan cancellation have been a point of contention for some. To qualify, borrowers must have an adjusted gross income below a certain threshold, depending on their filing status. While this may be a reasonable approach to target relief to those who need it most, it has left some feeling excluded.
Despite these challenges, the Education Deaprtment has released a simplified application process for borrowers to claim relief. Borrowers have until the end of 2023 to apply, and many with income information on file will have the forgiveness automatically applied to their accounts.
For those who need to provide proof of their earnings during the pandemic, the process is straightforward. You’ll need to complete a simple application on StudentAid.gov that asks you to confirm you meet the income requirements and provide your name, Social Security Number, date of birth, phone number, and email address.
Overall, Biden’s student loan cancellation program represents a significant effort to alleviate the burden of student debt on millions of Americans. While it may not be perfect, it is an important step towards a more equitable and just higher education financing system.
Whose eligible: You’re eligible if you earned less than $125 thousand in either 2020 or 2021 and have Ed-owned federal student loans, including Direct Loans, Parent PLUS Loans, consolidation loans, FFEL Loans, and Perkins Loans. Privately-held federal student loans do not qualify for the cancellation benefit. If you refinanced your federal loans with a private lender during the pandemic, you might be eligible for this program as well.
How to apply: The student loan forgiveness application portal is closed until the Supreme Court issues a ruling letting the Education Department move forward with Biden’s plan.
When to apply: If the Court rules that the plan is legal, the Education Department will reopen the application portal. Borrowers will have until the end of 2023 to apply for relief.
Learn More: When Will Student Loan Forgiveness Start?