Student loan forgiveness application is live. Is your California debt eligible for relief?
An early version of President Joe Biden’s one-time federal student loan debt relief application is open — allowing eligible borrowers to apply for up to $20,000 in school debt cancellation.
Those who submit an application through the beta website won’t have to resubmit another when the official application goes live later this month. The temporary site launched Friday night, according to the U.S. Department of Education, to help “refine” the application process.
An estimated 4 million Californians have some form of student debt. There is a chance any debt relief will be taxed in the state.
Here’s what you need to know about application deadlines, eligibility, what to expect when completing the form, plus tips for recently enrolled undergraduate students:
Biden’s student debt relief application
The student debt relief application takes about five minutes to complete and you don’t need to access an account or upload any documents.
Here’s how the application process works, according to the Federal Student Aid website, in three steps:
- Submit an application for federal student loan debt relief as soon as possible, but no later than Dec. 31, 2023.
- The U.S. Department of Education will determine your eligibility and contact you for any missing information.
- Your loan servicer will notify you when your relief has been processed.
The application will ask for your name, social security number, date of birth, phone number and email address. Once your application is processed, you will have up to March 31, 2024, to provide proof of income to the U.S. Department of Education.
A paper version of the online form will be available soon.
Do I qualify for student debt relief?
The program, according to the Federal Student Aid website, will erase loans of up to $20,000 to Federal Pell Grant recipients and up to $10,000 to non-Pell Grant recipients who made less than $125,000 in 2021 or 2020.
The program also extends joint filers and heads of household who made less than $250,000 in 2021 or 2020. Remember, you don’t need to meet the income criteria for both 2020 and 2021.
Check your income: If you filed federal taxes, your adjusted gross income can be found on line 11 on the Internal Revenue Service’s tax form, Form 1040.
To successfully apply for school debt forgiveness, according to the Federal Student Aid website, one of these statements must be true for 2020 or 2021:
- I made less than the required income to file federal taxes.
- I filed as a single tax-filer and made less than $125,000.
- I was married, filed my taxes separately and made less than $125,000.
- I was married, filed my taxes jointly and made less than $250,000.
- I filed as a head of household and made less than $250,000.
- I filed as a qualifying widow and made less than $250,000.
Are my student loans eligible for relief?
What is eligible:
Your subsidized loans, unsubsidized loans, parent PLUS loans and graduate PLUS loans held by the U.S. Department of Education are eligible.
The following types of federal student loans received by June 30, 2022, according to the Federal Student Aid website, are eligible for partial or full cancellation:
William D. Ford Federal Direct Loans
Federal Family Education Loans held by the U.S Department of Education or at a guaranty agency
Federal Perkins Loans held by the U.S. Department of Education
Defaulted loans
Consolidation loans are also eligible for relief if all of the underlying loans were held by the department of education.
If you have a FFEL loan or Perkins loan not help by the department of education, it is eligible if you consolidated before Sept. 29, 2022.
Parents with eligible student loans of there own should submit a separate application from their child.
What is not eligible:
Private loans or non-federal loans, according to the Federal Student Aid website, are not eligible for cancellation.
Any new loans dispersed on or after July 1, 2022, are also not eligible for relief.
Tips for recently enrolled undergraduate students
Dependent students’ debt relief eligibility will be based on their parent’s income.
Those likely classified as dependent students aren’t married, were born after Jan. 1, 1998, and were enrolled in college between July 1, 2021 and June 30. Independent students, according to the Federal Student Aid website, meet the following criteria:
- At least 24 years old
- Married
- A graduate or professional student
- A veteran
- A member of the armed forces
- An orphan
- A ward of the court
- Someone with legal dependents other than a spouse
- An emancipated minor or someone who is homeless or at risk of becoming homeless
Listen up: Dependent students should still apply using their own income. When it’s time, the U.S. Department of Education will email the dependent with instructions for both them and their parent.
This story was originally published October 17, 2022 at 12:22 PM with the headline "Student loan forgiveness application is live. Is your California debt eligible for relief?."