Do you have federal student loans? You probably have lots of questions right now.
President Joe Biden announced a first-of-its-kind federal student loan cancellation plan Aug. 24 that would wipe out up to $20,000 worth of federal student loans for millions of Americans.
The process may be automatic for some borrowers. Others will need to fill out an online application, which is expected to go live by early October.
The pause on student loan repayments has also been extended one final time until Dec. 31 — but there’s a lot to figure out before 2022 is over.
Details on the nuts and bolts of this executive order continue to evolve. We’ll know more in the coming weeks, but here are answers to some of our readers’ most pressing questions.
Frequently Asked Questions About Student Loan Forgiveness
1. Who Qualifies for Student Loan Forgiveness?
Any federal student loan borrower earning less than $125,000 a year ($250,000 for married couples) is eligible for $10,000 in loan forgiveness.
Eligibility will be based on your adjusted gross income. If your AGI was less than $125,000 for either 2020 or 2021, you’re eligible.
2. Do You Need to Apply to Qualify for Loan Forgiveness?
Loan forgiveness should be automatic for borrowers who meet the income requirement and recertified their income this year with the US Department of Education.
For example, if you enrolled or reapplied for an income-driven repayment plan on studentaid.gov and submitted your most recent tax return, you shouldn’t need to do anything else.
You Might Have Apply for Loan Forgiveness if …
Otherwise, you’ll need to fill out an application to receive federal student aid forgiveness. The application is expected to go live on studentaid.gov by early October.
Once it’s available, the sooner you can submit…