Student Loans: When to Apply to Get Up to $20,000 in Student Debt Cancellation

Big relief is coming this year for many borrowers who owe money on student loans. How much $20,000 in student loan debt may be cleared from your account soon if you are eligible. In addition to canceling, if you made payments on your student loans during the moratorium, you can request a refund from your creditor. If you’re not eligible for student loan forgiveness — or if you’ll still owe money after the debt is canceled — you you won’t have to make a payment until January 2023.

Although some borrowers can automatically see their debt forgiven by the Department of Education without taking any additional steps, most will need to apply for forgiveness. We’ll explain below.

Keep reading to find out if you’re eligible for the Student Loan Debt Relief Plan and how to apply. Also, watch out for student loan forgiveness scams from noticing these red flagsand here it is states tax canceled student loan debt.

First, find out if you qualify for student loan debt forgiveness

Under President Joe Biden’s plan, the Department of Education would cancel up to $10,000 in federal student loan debt for individual borrowers who make less than $125,000 a year or less than $250,000 for married borrowers or those who are heads of households.

You may also be eligible for an additional $10,000 in relief if you received federal Pell Grants while enrolled in college.

You may need to fill out a student loan debt forgiveness application

Whether you should apply for student loan debt forgiveness depends on whether the Department of Education already has information about your income – this group of borrowers mostly includes those enrolled in income oriented repayment plans.

If the department has your income details, it will automatically cancel your eligible debt. You won’t need to do anything else.

If the department does not have information about your income, you must complete a new application from the Biden administration to provide the information the department needs to cancel your debt.

When will the debt forgiveness application be available?

In an Press briefing on August 26National Economic Council Deputy Director Bharat Ramamurthy said the application for student debt forgiveness will go live in beginning of October. He also said that once borrowers fill out their applications, “they can expect relief within four to six weeks.”

“Borrowers are advised to apply by approximately November 15 to get relief before the payment break expires on December 31,” Ramamurthy said.

You can choose to be notified when the app becomes available by going to Ministry of Education subscription page and sign up to receive “Federal Student Loan Borrower Updates,” the first check box in a long list of educational topics.

We’ll update this story with more details when the app is available.

For more details on money, here’s what to do if you can’t pay your credit card bills on time. Also, here what can happen to your credit score if your student loans are forgiven.