KANSAS CITY, Mo — The Biden Administration officially launched the student loan forgiveness application online. Eight million Americans have already applied over the weekend after a beta version of the website took off on Friday.
Borrowers must have a 2020 or 2021 tax year income of less than $125,000 for individuals and less than $250,000 for married couples or heads of household to be eligible.
The Biden Administration did scale back who qualifies since announcing the forgiveness plan in August. Those who don't qualify include borrowers with loans held by private lenders.
“Some of the debt that was held, not held by the department of education, was essentially not included in the program anymore. So some of the older loans that are on the books, some were held by the Department of Education, some were held by private institutions,” said Jason Anderson, a student loan advisor. “There’s gonna be a handful of million borrows that won’t get this forgiveness anymore based on that change.”
Anderson’s biggest advice for borrowers is to act fast and apply.
“We knew we would likely have some legal challenges to this and we’ve seen that play out. And so what I’m telling people at the moment is to fill it out as soon as possible so that you can get as early in that queue as you can. We hear that its gonna take about 4-6 weeks,” said Anderson. “You go to studentaid.gov, the application is posted there, you fill out some basic demographic information and right after that its gonna ask basically whether you meet the income qualifications.”
If you made elective payments during the COVID-19 moratorium and have already paid off your loans, you can apply for forgiveness online. There is an automatic mechanism set in place that could give you some of that money back.
Anthony Newsome, a 2019 graduate, wasted no time applying for a chance to save $20,000 that he still owes the government.
He graduated from the University of Missouri and UMKC after studying public policy and political science. Even with numerous scholarships, it cost him about $50K in loans to finish higher education.
“It would be a huge relief, just knowing I don’t have that hanging over me anymore,” said Newsome.
As a Pell Grant recipient, his remaining debt from undergrad would be wiped out. He hopes for a fresh start so he can further his education in law school.
“Thankfully the way it’s set up, if it goes through for me, like most of my loans will be taken care of. But I know a lot of people will still have a substantial bill so,” said Newsome.
