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Government open beta version of the app


The Department of Education (ED) has opened a beta version of the student loan waiver application process at studentaid.gov/debt-relief/applicationprovides recurring access to a select number of borrowers who can sign up before the official launch.

“We’re accepting applications to help us refine our processes… If you submit an application, it will be processed and you won’t need to resubmit,” according to the website. .

No official launch date has been provided.

Simple online form similar to form Preview provided to press on Tuesday. It requires borrowers to provide their name, Social Security number, date of birth, phone number, and email. Borrowers will not need to upload any documents or log in with their Federal Student Aid (FSA) ID. To prevent fraud, all borrowers must prove their eligibility for perjury and jail time.

After submitting the application, the borrower will receive a confirmation email. The ED will contact the borrower via email if additional information is needed. Borrowers will also receive a notification when the application is approved and sent to the loan service provider. The loan officer will then notify the borrower when forgiveness has been applied and if a new payment is available based on any remaining outstanding balance.

(Screenshot: StudentAid.gov)

(Screenshot: StudentAid.gov)

Borrowers have until the end of 2023 to apply, but are encouraged to apply by mid-November. Early registration gives lenders enough time to recalculate their monthly payments. month on the borrower’s new loan balance before payments resume in January 2023.

An ED official said that borrowers will receive the debt relief “within weeks” after completing the form. The department expects to process the majority of requests by mid-November before January payments resume.

In August, the Biden administration announced $10,000 in forgivable student loans plus a additional $10,000 in forgiveness for Pell Grant receiver. Single borrowers earning less than $125,000 in adjusted gross income (AGI) and heads of household or married filing jointly borrowers earning less than $250,000 in AGI are eligible to be cleared in debt.

Follow White House Predictions.

Here’s what you need to know about Biden’s student loan forgiveness.

Beware of scammers

Be wary of anyone offering to remove a loan, who also asks for payment and/or submits a link to the non-official website at StudentAid.gov, which is the only site where the app is available.

White House Avoid Student Loan Scams

White House Avoid Student Loan Scams

What types of student loans are eligible for forgiveness?

Only federally backed student loans are eligible for forgiveness. Loans from private banks and non-qualified lenders – this includes federal loans that are consolidated with a private lender.

Direct undergraduate and graduate loans are eligible for cancellation along with Parent PLUS loans made by a parent or guardian.

As of September 29, 2022, borrowers with federal student loans that are not held by the Department of Education will not be eligible for forgiveness by pooling those loans into loans. directly federal. If you have FFELs and Perkins Loans that are not owned by the Department of Education and have applied to incorporate them into the federal direct loan program by September 29, 2022, they are eligible for a loan waiver. get a loan.

If your loans are in default, use New start program to put them back in good condition.

Biden Eligible Loans

Loans eligible for debt forgiveness by Biden

Who is eligible for $20,000 student loan forgiveness?

Borrowers who have received Pell Grants and earn less than $125,000 as individuals or less than $250,000 as married couples are eligible to receive $20,000 for loan forgiveness. student. Your income is based on your 2020 or 2021 federal tax return AGI.

What is Pell Grant?

One Pell Grant is a federal grant for low-income undergraduate students who have not earned their first bachelor’s degree with the greatest demonstrated financial need. Eligibility is determined from the documentation provided on the application for free federal student aid, called FAFSA.

In 2020-21, approximately 6.4 million students receive Pell Grants with an average award of $4,166, and more than 78% of recipients have family incomes below $40,000, according to the National Association of financial aid administrators for students (NASFAA).

Who is eligible for a $10,000 student loan forgiveness?

People who do not receive Pell Grants but earn less than $125,000 as an individual or less than $250,000 as a couple are eligible for $10,000 student loan forgiveness. Your income is based on your 2020 or 2021 federal tax return. Earnings are expected to be based on adjusted gross earnings (AGI), but we’re awaiting confirmation from ED.

Loan Forgiveness Debt Allocation

Credit: NASFAA

What happens to my payments if I do not qualify for forgiveness or forgiveness does not cancel all of my debts?

Biden also extended the moratorium on or ban on federal student loan payments through December 31. It is not expected to be extended again. If you’re still in debt after being forgiven, your loan officer will recalculate your new balance and monthly payments. Payments will resume in January 2023.

Is forgiven student loan debt taxable?

Not at the federal level. This debt relief would not be considered taxable income for federal income tax purposes because of a provision in the American Rescue Plan passed in March 2021.

However, some states – such as Arkansas, Minnesota, North Carolina and Wisconsin – can be considered taxable income.

What happens to any payments I made during the payment pause?

If you made payments during the federal student loan deferral period (starting March 13, 2020), you may be able to get a refund for your payments by contacting your creditor. your loan service provider, according to Federal Student Aid Website.

Is this the same as the Public Service Loan Forgiveness (PSLF) program?

No. Public service loan forgiveness offers student loan forgiveness for those who have worked for at least 10 years in public service jobs with federal, state, local, or certain nonprofit organizations such as teachers, nurses , doctors, lawyers and other professionals. The PSLF waiver expires on October 31.

Ronda is Yahoo Money’s senior personal finance reporter and an attorney with experience in law, insurance, education, and government. Follow her on Twitter @writesronda

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