How To Get Up To $20,000 In Student Loan Forgiveness Under Biden’s New Plan

President Biden announced a sweeping new student loan forgiveness initiative on Wednesday that will provide billions of dollars in student debt cancellation to millions of borrowers. Up to 20 million borrowers may have their student loan debt completely eliminated under the initiative, according to Department of Education officials.

“Today, we’re delivering targeted relief that will help ensure borrowers are not placed in a worse position financially because of the pandemic, and restore trust in a system that should be creating opportunity, not a debt trap,” said Education Secretary Miguel Cardona in a statement.

Here are key details about who qualifies, and how to apply to relief.

$10,000 or $20,000 in Student Loan Forgiveness

Biden’s plan provides for up to either $10,000 or $20,000 in student loan forgiveness. The difference in eligibility tiers is related to whether the borrower received Pell Grants, which is a type of federal student aid provided to lower-income borrowers that does not have to be repaid. Borrowers who did not receive Pell Grants can receive up to $10,000 in student loan forgiveness, while borrowers who received Pell Grants can receive up to $20,000 in student loan forgiveness.

For both levels of loan forgiveness, borrowers must earn less than $125,000 per year in income, or $250,000 per year if they are married.

The student loan forgiveness is available for any government-held federal student loan including undergraduate federal student loans, graduate federal student loans, and Parent PLUS loans that are held by the government.

Some Student Loan Forgiveness Will Be Automatic

The Biden administration has indicated that the Education Department will be able to provide at least some of the relief automatically, without borrowers needing to take any action. This primarily includes borrowers who already have their income information on file with the department, such as borrowers who recently applied for, or re-certified for, an income-driven repayment plan. The department is also able to determine which borrowers received Pell Grants.

The administration estimates that 8 million borrowers will qualify for this automatic relief, and so they will not need to take any action.

Some Borrowers Will Need to Apply for Student Loan Forgiveness

The Education Department indicates that borrowers who don’t have their income information on file will need to complete and submit an application certifying their income. Borrowers who are not sure whether or not the department has current income information should err on the side of submitting the application, according to published guidance.

The application for the Biden student loan forgiveness initiative is not yet available, but the Education Department indicates that it “will be available before the pause on federal student loan repayments ends on December 31st.” As part of the Biden student loan forgiveness initiative, the ongoing pause on student loan payments has been extended to December 31.

The administration is offering borrowers the opportunity to subscribe to a notification system, which will provide notices to borrowers once the application is available. You can sign up here.

Further Student Loan Reading

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Who Qualifies For Nearly $4 Billion In Automatic Student Loan Forgiveness Under New Biden Initiative

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