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For the most up-to-date information on federal student loan forgiveness, go to the U.S. Department of Education's Federal Student Aid website.
Applications for federal student loan forgiveness under President Biden's new debt relief plan became available in October 2022. The plan is currently on hold due to a court order, but borrowers are still encouraged to apply, as applications will be reviewed while a decision is pending. In the meantime, there are several important dates to make note of. Jot these dates down to make sure you don't miss a step in qualifying for $10,000 to $20,000 of student debt relief.
November 15, 2022
This mid-November date is the last point at which you can apply for student loan forgiveness and hope to receive your forgiveness before the payment pause ends on December 31, 2022. This is because it is expected to take up to six weeks for applications to process.
If you apply after this date, you may still be waiting for approval when the pause ends on December 31. This could mean you may then owe payments on debt that is potentially forgivable.
January 1, 2023
Federal student loan payments will resume in January and interest will begin to accrue on previously paused loans again.
If you have not applied for loan forgiveness or know that you have debt that will not qualify (if you are carrying more federal student loan debt than the forgiveness plan allows, for example), you should prepare to begin making payments again in January.
December 31, 2023
At the end of 2023, applications for student loan forgiveness will close. Anyone hoping to get up to $20,000 in federal student loans forgiven should apply before December 31, 2023.
How Much Student Loan Forgiveness Could You Qualify For?
Only federal student loans qualify for debt forgiveness. A good way to tell if a particular loan is eligible is if it is part of the federal pause instituted by the CARES Act in March 2020.
There are two tiers of student loan forgiveness for which you may qualify, which are:
- $10,000: You may qualify for up to $10,000 in federal student loan forgiveness if in 2021 or 2020 you made less than:
- $125,000 as a single person
- $250,000 as a married person
- $20,000: You may qualify for up to $20,000 in federal student loan forgiveness if you received a Pell Grant to attend school. You must also meet the above income qualifications.
You can qualify for forgiveness even if your loan is in default. But first you will have to begin the U.S. Department of Education's Fresh Start program, which provides benefits that can help you take your loans out of default. Then you can apply for forgiveness.
How to Apply for Student Loan Forgiveness
The student loan forgiveness application process is simple. Begin by verifying that you meet the above qualification standards.
Once you are sure that you do, fill out the application at studentaid.gov. Make sure you have this information ready:
- Your name
- Social Security number
- Date of birth
- Phone number
- Email address
You must also be prepared to provide your proof of income to the U.S. Department of Education if it requests documentation. You will have up to March 31, 2024, to provide it if it's requested.
If you are on an income-driven repayment (IDR) plan, you may not need to apply at all. Student loan forgiveness should be automatic for borrowers enrolled in these plans. However, it is a good idea to verify that your automatic forgiveness processes as expected so as not to miss the deadlines to manually apply otherwise.
Save the Date
Noting the essential dates of student loan forgiveness is necessary to optimize your loan forgiveness amount. Get the most out of your loan forgiveness opportunity by applying soon.
Besides saving on the principal and interest of your potentially forgivable student debt, you can possibly improve your ability to get approved for other loans by reducing your debt. That's due to lowering your debt-to-income ratio. Debt-to-income ratios are heavily considered in certain lending decisions. A lower ratio can mean an increased likelihood of getting approved for the credit and loans you want.
Making sure your credit report and score are in good shape is also an essential part of preparing yourself for financial steps like getting approved for a mortgage. You can start with getting free credit monitoring from Experian, which shows you where your credit stands and alerts you to changes on your credit report.
Reducing debt and optimizing your credit can help set you up for your next financial steps. Save these federal student loan forgiveness dates as a first step toward building a better financial future.