By Leada Gore
Federal student loan borrowers can have up to $20,000 of their debt forgiven, according to the new White House plan. There are important dates you need to know to take advantage of the plan, however.
President Joe Biden’s student loan forgiveness plan covers student loans up to $20,000 for Pell Grant recipients and $10,000 for other loan holders, assuming they meet income caps. To be eligible, individuals need to have a 2020 or 2021 Adjusted Gross Income, or AGI, of less than $125,000 or $250,000 for combined household income.
Most seeking debt forgiveness will have to apply but that form hasn’t been released yet. The Education Department said it should arrive by “early October 2022.” It is expected to initially be an online form with a paper version following.
To receive forgiveness before the end of the year – an important date since payments and interest accrual will restart in January 2023 – you will need to have your application in by Nov. 15. Borrowers can expect to see the forgiveness applied to their loan balances within four to six weeks after completing the application, according to the Department of Education.
The department will start processing applications on a rolling basis and will continue to do so after the federal student loan pause expires.