Borrowers Have Until End of 2023 To Apply for Student Loan Forgiveness

Borrowers Have Until End of 2023 To Apply for Student Loan Forgiveness

Deadline SET – Government Plan Has Its Limits

( – President Joe Biden announced on August 24 that he would forgive a portion of student loan debt for lower earners. The loan forgiveness is part of a plan to help people transition back to making regular payments when the pandemic suspension ends. The deadline to apply is December 31, 2023, but applications are not yet available.

The pause on student loan payments began under the Trump administration, but both presidents extended it multiple times. When revealing the forgiveness plan, Biden moved the payment freeze end date one last time to December 31, 2022.

Under the debt relief, students in households earning under $250,000 a year (or $125,000 individually) will receive at least $10,000 off their loans. Those who received Pell grants will get up to $20,000. The plan only applies to US Department of Education loans and is a one-time offer for people with existing debts. It is not a refund and only reduces burden, meaning those with under $10,000 (or $20,000) in outstanding loans will get their balances cleared but won’t see any actual payments.

Some borrowers will receive automatic forgiveness if the Department of Education has current income details. Those currently on income-based repayment plans or who have a current Free Application for Federal Student Aid submissions qualify for instant relief. Otherwise, individuals will need to complete the application, which should be available in October.

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