Have student loans that qualify for forgiveness? Know these dates
In August, President Biden announced his plan to eliminate $10,000 worth of federal student loan debt per borrower for those who make less than $125,000 annually. Plus, he promised to erase up to $20,000 in debt to those who borrowed money under the Pell Grant program, which mainly targets low-income students and families.
But that forgiveness won’t come automatically.
The majority of borrowers will have to fill out an application to see if they qualify for forgiveness. That’s because out of 45 million people with student loan debt, the Department of Education says it only has income information for 8 million borrowers who enrolled in income-driven repaying plans or recently filled out a FAFSA.
Here’s the forgiveness timeline
Early October 2022:
Application for Student Forgiveness will be released.
November 15, 2022:
Apply for student loan forgiveness by this date as there’s a 4-6 week turn around for forgiveness.
January 1, 2023:
Interest will begin accruing again on the remaining balance and regular payments will resume.
December 31, 2023:
Final deadline to apply for student loan forgiveness
The millions of Americans burdened with student loans hold more than $1.7 trillion in debt. Most of that is federal.
Plus, most Gen Z and millennial borrowers delayed a major financial decision — such as buying a house — thanks to their student loan debt, according to a 2022 survey from Bankrate.com.
What does this all mean for you?
There is a good chance you will have to fill out some paperwork before December 2023 — but you can get started as soon as next month.
Sources
Time: Student Loan Forgiveness Dates to Remember: How and When Borrowers Need to Act
Forbes: Big New Details On Biden’s Student Loan Forgiveness Plan, Including When To Expect Relief
Newsweek: Key Dates in Student Loan Forgiveness Application Process
Bankrate.com: Survey: Student loans have delayed wealth-building for Gen Z and millennial borrowers
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