President Joe Biden announced on Monday that the federal application for Americans who want their student loans forgiven is now open for business. This is the latest step in his plan to help as many as 43 million people get out of debt.
“Today, I’m announcing millions of people working and middle-class folks can apply and get this relief. And it’s simple and it’s now. It’s easy,” Biden said in comments from the White House alongside Education Secretary Miguel Cardona.
“This is a game changer for millions of Americans … and it took an incredible amount of effort to get this website done in such a short time.” People who want to apply for help with their student loans can now fill out the form at Studentaid.gov in either English or Spanish.
On the form, there is information about who can get debt relief and how it works. It asks applicants for their full names, Social Security numbers, dates of birth, phone numbers, and email addresses, among other things. Borrowers can send in an application until December 31, 2023.
Biden said in August that he would forgive up to $10,000 in student loan debt for people who make less than $125,000 a year, or up to $20,000 for eligible borrowers who also got Pell Grants.
The Student Loan Debt Relief application is open!
— The White House (@WhiteHouse) October 17, 2022
Those who want to borrow must have federally held student loans. In addition to federal Direct Loans used to pay for an undergraduate degree, federal PLUS loans borrowed by graduate students and parents may also be eligible, as long as the borrower meets the income requirements.
Applicants who are “more likely to exceed the income cutoff” will be required to present additional documentation, such as a tax transcript, according to the Biden administration. And while borrowers won’t have to pay federal income tax on the amount of their student loan debt that is forgiven, some may have to pay state income tax on that amount.
The Department of Education has also said that it already knew the incomes of almost 8 million borrowers. This is likely because the borrowers had filled out financial aid forms or applied for an income-driven repayment plan in the past.
If those borrowers meet the income requirements, they will automatically get debt relief unless they choose to opt-out. The department says it will send an email to borrowers who might get debt relief but don’t need to apply.
When the application is officially released, it will be the next step in a hugely technical project that federal agencies and student loan servicers are working on to help tens of millions of borrowers.
On Friday night, a beta version of the website went live, and Biden said that over 8 million Americans filled out their applications on the website over the weekend.
The President gave credit to “a talented group of data scientists and engineers across the federal government” who “built, tested, and launched this new application in just weeks.” Biden said that during the few days of beta testing, the website “handled more than 8 million applications without a glitch or difficulty.”
“As millions of people fill out the application, we’re going to make sure the system continues to work as smoothly as possible so that we can deliver student loan relief for millions of Americans as quickly and as efficiently as possible,” he added.
Several lawsuits have been filed against the Department of Education over its policy on forgiving student loans. After hearing a motion for a preliminary injunction last week, a US district judge could soon decide whether to temporarily stop the program from going into effect. This could put off getting rid of student loans until the judge makes a final decision on the case.
At the end of his speech, Biden was asked about lawsuits that could go against the plan. He said that he thinks the plan will stand up in court. Joe Biden also went after Republicans who were against his plan to help students pay off their debts. He said their anger was “wrong” and “hypocritical.”
— philip lewis (@Phil_Lewis_) October 15, 2022
“I will never apologise for helping working Americans and middle-class people as they recover from the pandemic. Especially not the same Republicans who voted for a $2 trillion tax cut in the last administration, mainly benefited the wealthiest Americans and the largest corporations and didn’t pay for a penny of it and racked up the deficit,” he added.
Borrowers whose federal student loans are guaranteed by the government but held by private lenders are currently not eligible. Many of these loans were made through the former Federal Family Education Loan programme and Federal Perkins Loan programme. Borrowers who want to consolidate their loans into Direct loans must do so by September 29.
The Education Department said at first that these privately held loans would be eligible for the one-time forgiveness action. However, in September, six Republican-led states sued the Biden administration, saying that forgiving the privately held loans would hurt the finances of states and student loan servicers.
CNN asked Cardona about the fact that people with privately held loans can’t get mass relief. In response, Cardona said that the government is “moving as quickly as possible to provide relief to as many people as possible.”
Follow us on Lee Daily for more news like this.