President Biden approved a Federal Student Loan Forgiveness program that will forgive up to $20,000 in student loan debt.
As of August 26, 2022, we know many details but not all.
Many are wondering, “How do I get my loan forgiveness money?”
Here’s everything you need to know:
The most common questions are:
- Who is eligible for loan forgiveness?
- How do I apply?
- How much can I receive?
The good news is 43 million people will benefit from this plan so there is a high chance you can qualify. If you received a Pell Grant for your studies, you can receive up to $20,000. If you did not receive a Pell Grant, you are eligible for up to $10,000.
60% of of eligible borrowers received a Pell Grant and if you cannot recall whether you received one, you can check your records by visiting the government’s Student Aid site here.
In order to qualify, you must make less than $125,000 per year. Assuming you were below this threshold in 2020 and 2021, you will be eligible.
If you received any loan under the William D. Ford Federal Direct Loan Program, you will qualify. These include:
- All subsidized and unsubsidized federal student loans
- All Direct Stafford Loans
- Parent Plus Loans
- Grad Loans
If you happen to have a commercially held Federal Family Education Loan, there is a process by which you may qualify but you have to take some additional steps.
Step 1: Figure out if the Federal Education Department has taken control of your loan (check student aid site above).
Step 2: If your FFEL loan is still commercially held you must consolidate into the Direct Loan Program and then you can become eligible.
Private loans are not a part of this program.
How do I receive my loan forgiveness?
As we speak, the government is creating an APP that will allow you to fill out an application with your information. This APP will be available before the end of the year according to the government.
In the meantime, you can sign up for updates here.
If you are in the “income driven repayment plan” which 8 million Americans already are, your debt might be automatically cancelled.
Federal Loan Payment Pause
One more piece of good news to those eligible is there is an extension on the payment pause for federal student loans until December 31, 2022. This extension began under President Trump during various Covid relief measures and has been extended for the seventh time just now by President Biden.
We will update this regularly as new information comes in.
