Apply before November 15 for student loan forgiveness. here’s why
Whatever happens with the current legal challenges at student loan debt forgivenessyou must submit your application before November 15 to receive up to $20,000 in relief before payments resume next year.
Borrowers technically have until the end of 2023 to file for forgiveness, but experts say applying earlier could reduce your loan repayments or wipe out your balance, putting you in a better financial position come January. The Biden administration is also urging borrowers to apply before the Nov. 15 deadline.
(Click on the image below to register for our Student Loan Forgiveness Webinar November 15 at 6 p.m. EST. Senior reporter Alex Gailey and student loan expert Robert Farrington will review Biden’s relief plan, where it stands legally – and answer questions)
student loan specialist Robert Farrington say it legal challenges surrounding loan forgiveness could continue for months, leading to potential stops and starts in the process. But if borrowers start getting debt relief, it will become much harder to get back, he says.
“The urgency is simple: the administration wants to cancel as much debt as possible as quickly as possible,” said Farrington, the founder of The College Investor, an online resource for student loans. “It’s really hard to put the cat back in the bag. Once forgiveness actually starts on loans, it would be very difficult for anyone to stop it.
President Joe Biden’s student loan relief was held in court for weeks after a series of lawsuits from Republican-run states and conservative groups. One of the lawsuits successfully blocked the plan in federal court, and it’s not yet clear whether the Biden administration will be able to deliver massive student loan forgiveness to millions of borrowers as promised.
“The biggest challenge for student loans is the appeal in the 8th Circuit Court right now,” Farrington said. “They’ve been sitting on the case for two weeks, and no one really knows why.”
Regardless of what happens in court, it’s worth setting aside a few minutes of your day to apply for that one-time debt relief. Applying is simple and easy – here’s a step-by-step guide on how to apply and what to expect next:
Step-by-step guide on how to apply for student loan forgiveness
The application Applying for student loan forgiveness is quick and easy. You do not need to log in or provide any documents. Borrowers can get between $10,000 and $20,000 in student loan repayment, depending on their type of loan and if they meet income requirements. Borrowers with Pell Grants are eligible for $20,000 in loan forgiveness, while borrowers with other federal loans are eligible for $10,000. To be eligible, people with federal student loans must earn less than $125,000 per year, and married couples or heads of households must earn less than $250,000 per year.
Beware of Student Loan Forgiveness Scams
If you get a call or email from someone saying they will help you get debt relief for a fee, it’s a scam. You never have to pay for aid with your federal student aid. look at this do’s and don’ts list regarding student loan forgiveness scams, according to the Department of Education.
To apply, first go to official candidacy. Then you will follow these steps:
1. Type your name, social security number, date of birth, phone number, and email address, in that exact order.
2. Review your application by typing your name again and checking the box at the end to certify that you are eligible for the rebate.
3. Click “submit”.
What is the next step after applying for student loan forgiveness?
After submitting your application, you will receive an email confirmation and the Department of Education will contact you if they need you to provide proof of income. Expect a wait time of four to six weeks after you submit your application for it to be reflected in your loan balance, though it could be longer if Biden’s pardon plan continues. be held in court. Your loan manager will let you know if and when your balance is forgiven. For borrowers with multiple different loans, the Ministry of Education will apply relief in the following order:
- Loans held by the Ministry of Education in arrears
- Defaulted FFEL program commercial loans
- Non-defaulted direct loans and FFEL program loans held by the Ministry of Education
- Perkins loans held by the Department of Education
For borrowers with multiple loans in the same loan category, the Ministry of Education will apply relief in the following order:
- Loans with the highest interest rate
- If interest rates are the same, unsubsidized loans will be canceled before subsidized loans
- If the interest rate and grant status are the same, the most recent loans will be canceled
- If the interest rate, grant status and disbursement date are the same, the loans with the lowest combined principal and interest balance will be cancelled.
While the forgiveness plan is pending, there is lots of things borrowers can do in the meantime to ease their financial situation. If you’ve made student loan repayments during the pandemic, experts recommend request a refund through your loan servicer if you have not already done so, especially if you have repaid your loans or your current balance is greater than the amount of debt relief you will receive.
The Department of Education will automatically refund the amount you paid during the payment break only if your current loan balance is less than the amount of debt relief you will receive. Let’s say you paid $1,000 for your federal student loans during the payment break. If you currently owe $9,500 and qualify for $10,000 assistance, then $10,000 will be applied to your loan(s) and you will automatically be reimbursed $500.
Also, you should expect payments to resume in 2023. The Biden administration has said the last student loan repayment extension the pause is the last to “ensure a smooth transition to reimbursement and avoid unnecessary defaults”. Even so, Farrington said he may see Biden extend the payment break at least once more due to ongoing legal challenges.
Even if payments are delayed again, they will eventually start and it is best to prepare in advance. Now might be a good time to adjust your monthly payment expectations, review your budget, and make sure you feel financially comfortable about starting repayments. To move forward, you could set aside a specific amount in a high yield savings account with a competitive interest rate. This way, you can earn interest on your savings until the end of December and then pay a lump sum on your student loans.
- January 1, 2023: Resumption of student loan repayments
- December 31, 2023: Student Loan Forgiveness Application Closed
Want to know more about student loan forgiveness?
The recommended application deadline for student loan forgiveness is November 15, and it’s important to put all your ducks in a row and take advantage of this one-time relief program, even if it’s in legal limbo. Join us at 6 p.m. EST on November 15 for a free webinar with student loan expert Robert Farrington to discuss Biden’s forgiveness plan. We’ll keep you up to date on what’s going on legally with the plan and answer any questions you have.