President Joe Biden announced on Monday, Oct. 17, that the application portal for the Federal Student Debt Loan Relief was open for applications.
Federal loan borrowers can now apply to have upwards of $20,000 of their student debt forgiven based on several factors.
Borrowers cannot apply for the forgiveness if their income exceeds 125,000 annually. Couples applying for forgiveness cant make more than 250,000 per year.
Along with that, applicants are eligible to receive a higher financial compensation if they received a federal PELL grant during their education. These grants are awarded to students facing a particularly high need of financial assistance to attend a college or university. Borrowers who did receive a PELL are eligible to have upwards of $20,000 forgiven, while other
Borrowers are eligible to receive $10,000 if forgiveness towards student loan repayment.
It is important to note that these applications likely won’t be processed for several weeks, so borrowers might be waiting some time to see their debts lowered. Luckily, student loan repayment has been paused until December 31, 2022. It is noteworthy that these payments have been repeatedly paused to ensure Americans wouldn’t suffer a great financial burden due to the coronavirus pandemic. So the debt repayment pause could be extended again.
There is a series of lawsuits being filed to prevent this debt relief from coming to fruition. These lawsuits argue that a sitting president doesn’t have the legal ability to forgive student debts. These lawsuits are being filled in Illinois, Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina. Although these lawsuits will need to be contested in a court of law, the White House maintains that Biden is well within his rights to provide this debt relief.
The application is available online at student aid.gov. An important note for borrowers looking to apply for forgiveness is that no debt beyond June of 2022 will be forgiven by this one-time relief program. So students attending fall semester will be paying the full loan amount for this and any upcoming semesters.
This program looks to assist over 40 million students nationwide who would otherwise struggle to afford their increasing monthly loan repayment. If you or someone you know is in need of financial assistance in regards to federal Student loan payments, this application will be available until December 31, 2023. The application will likely be revised to adequately provide necessary tools and information to applicants.