You Can Still Apply for Student Loan Forgiveness

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Stanley Tate

#1 Student Loan Lawyer

Updated on January 21, 2023

Despite the ongoing economic struggles caused by the pandemic, there is still hope for those burdened by student loan debt. The question on many minds: Can I still apply for student loan forgiveness? The answer is a resounding yes.

Multiple federal programs are available to those seeking loan forgiveness, including the Public Service Loan Forgiveness program, the Income-Driven Repayment Plan Forgiveness, the Borrower Defense to Repayment program, and the Total and Permanent Disability Discharge program. Each program has the potential to erase borrowers’ entire student loan balance.

Related: How to Apply for Student Loan Forgiveness

The story is different for President Joe Biden’s debt cancellation plan. Last summer, the president announced he would forgive up to $20 thousand in federal student loans for those who received a Pell Grant and met the income requirements. The U.S. Department of Education quickly launched an application, and over 26 million applied, according to the White House. But the department was forced to stop accepting applications following a flurry of legal challenges filed by Republican-led states and conservative groups.

As a result, Biden’s student loan forgiveness plan is on hold as millions of Americans wait for the Supreme Court to decide its legality.

For those who have already applied, their applications will be on hold, even if they’ve already received notice that their application was approved.

For those who haven’t yet applied, it is unclear if the application will reopen and, if so, when. The application was set to remain open until December 31, 2023, but the plan’s fate remains uncertain as the court’s decision is pending.

If the application process reopens, it is expected to be streamlined, letting borrowers apply quickly and easily without logging into the Federal Student Aid website, StudentAid.gov.

The application process will only require basic personal information such as name, Social Security number, birth date, phone number, and email address. You won’t need to supply any income information if the Education Department already has it on file.

Two courts block student loan debt forgiveness

In the aftermath of President Biden’s bold move to cancel hundreds of billions of dollars in student loan debt for millions of Americans, a chorus of legal challenges arose, each singing the same tune: that the President had overstepped his bounds and that the plan was unlawful.

The Biden administration quickly brushed off many of these challenges, but two survived.

A federal appeals court in Missouri issued a temporary injunction on the president’s student loan forgiveness program, putting it on hold until a lower court can hear the merits of the case brought by state attorney generals from Arkansas, Iowa, Kansas, Missouri, Nebraska, and South Carolina. The attorney generals argue that the administration lacks the authority to authorize such an expansive move on its own and that it would deprive the states of future tax revenue.

In a separate legal challenge, a federal judge in Texas, Mark T. Pittman, declared the debt relief program was an unlawful use of the Heroes Act of 2003. The ruling came from a lawsuit filed by a conservative group, Job Creators Network, on behalf of two student loan borrowers, who argued that the plan was “irrational, arbitrary, and unfair.”

The Supreme Court recently agreed to hear the case, putting it on a fast track that should produce a final ruling by the end of June.

Education Secretary Miguela Cardona extended the payment pause, which froze most federal student loan payments with a 0% interest rate, until this summer.

Nearly all federal student loan borrowers are eligible for some cancellation

About 43 million Americans are burdened with federal student loan debt. President Biden’s debt relief plan promises to cancel the full remaining balance for nearly half of them. The only people who would be left out are those who exceeded the income requirements or only have privately held Federal Family Education Loans or Perkins Loans.

Related: Should I Consolidate My FFEL Loans to Direct Loans?

If the Supreme Court lets the plan move forward, the Department of Education will cancel up to $20 thousand in federal student loan debt for individual borrowers who make below $125 thousand per year or less than $250,000 for married borrowers or those who are heads of households.

About 95% of borrowers will benefit from cancellation, with 90% of those benefits going to those earning less than $75 thousand. The Congressional Budget Office estimates the plan will cost the federal government $400 billion over the next decade.

While implementing such a large-scale loan cancellation plan was bound to be challenged, the potential impact on the lives of millions of Americans cannot be ignored. This is a bold move to address the student loan debt crisis, and although it is not without its flaws, it is a step in the right direction.

Relief is limited to department-held federal student loans

President Biden’s student loan forgiveness plan is limited to federal student loans disbursed before June 30, 2022. All loans put on hold during the student loan payment pause are eligible for the program, including Direct Loans — Subsidized and Unsubsidized, Grad Plus, and Parent PLUS Loans.

Related: What are Ed-Owned Student Loans?

Private student loans aren’t eligible for the relief, but those who refinanced federal student loans with a private lender during the pandemic may receive a refund of up to $20 thousand.

Related: Can Refinanced Student Loans Be Forgiven?

At first, borrowers with other loan types, such as FFEL and Perkins loans, could make those loans eligible by combining them into a Direct Consolidation Loan.

But after the state attorney generals filed the lawsuit in late September, the Education Department reversed course and said that privately-owned FFEL and Perkins loans would no longer be eligible for forgiveness, even though they are federally guaranteed. This policy reversal excluded over 800 thousand borrowers from student loan forgiveness, according to an NPR report.

If you hold a mix of loan types, your Direct loans meet the eligibility requirements. But any privately-owned FFEL or Perkins loans do not.

You can find out what type of loans you have by contacting your loan servicer or logging into the StudentAid.gov website with your FSA ID.

Dec. 31 deadline

The deadline to apply for student loan debt relief is December 31, 2023

The initial deadline to apply for the president’s federal student loan forgiveness plan until December 31, 2023. But now that deadline may be extended, depending on what happens at the Supreme Court.

To get updates on when the student loan forgiveness application will reopen, visit the Department of Education subscription page and sign up to receive Federal Student Loan Borrower Updates, the first checkbox in a long list of education topics.

Screenshot of page to signup for student loan forgiveness updates.

Beware of scams

Be careful of people trying to trick you! Some companies might tell you they can help you get rid of your student loans for a fee. But you don’t have to pay for help with your federal student loans. Only work with the Education Department, your loan servicer, or a student loan lawyer.

Emails from the department will come from noreply@studentaid.govnoreply@debtrelief.studentaid.gov, and ed.gov@public.govdelivery.com.

If someone tries to scam you, tell the Federal Trade Commission by calling 1-877-382-4357 or going to reportfraud.ftc.gov.

Bottom Line

Although President Biden’s student loan forgiveness plan is on hold, other options exist for borrowers looking to have their loans forgiven. The Education Department continues to offer loan forgiveness for those who work full-time for the government or a nonprofit organization and make 120 qualifying monthly payments.

It’s also reviewing borrowers’ student loan repayment history to offer credit towards forgiveness after at least 20 years of payments. This one-time adjustment is expected to automatically eliminate the entire loan balance for tens of thousands of borrowers and push millions more at least three years closer toward income-based repayment forgiveness.

UP NEXT: The PSLF Waiver Ended — But You Can Still Apply

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