It’s A… Live! (Student Debt Relief, That Is)
Student Debt Relief
The moment you have all been waiting for has finally arrived. President Biden’s student loan debt relief program is officially accepting applications. I know many of you have been asking about this, and although we are all learning together, I figured it would be good to get out information as soon as we learned about it.
Let’s not bury the lead and start by sharing the website to apply for student loan debt relief. Here are the goods folks: https://studentaid.gov/debt-relief/application. Simply put, go to that site, and follow the fairly simple and straightforward directions. You will be required to enter your personal information including name, dob, SSN, and contact info. One has until December 31st, 2023 to officially apply for debt relief. Once requested you will then have to provide verifying documentation such as tax returns, and loan information.
Are you eligible for student loan debt relief?
Although I wrote about the full details in a previous post, here is the quick down and dirty about if you qualify. For starters, this applies to Federal Student loans only, not private loans. If you paid off your loans prior to 2020 you get a round of applause, but sadly no government relief. Assuming, you still have loans and/or paid them off since 2020 you may be eligible for $10,000 – $20,000 of one-time debt relief.
To qualify, the requirements on earnings are verified by showing your AGI (adjusted gross income). This number can be found on line 11 of the IRS form 1040. The requirements, verbatim from the government site, are below:
I affirm that ONE of the following is true for 2020 (Jan. 1–Dec. 31, 2020) or 2021 (Jan. 1–Dec. 31, 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(er) AND made less than $250,000.
In short, you will benefit if you hit the qualifications above. As a point of clarity, you do not need to meet the above requirements for both 2020 and 2021 to be eligible. Rather, you only need to hit the income requirements for one of those two years. Additionally, this can be applied to both students and parents, if both took out Federal loans. That said both individuals must fit the above requirements to be eligible.
When will student loan debt relief start?
Currently, there is no exact timeline on when you will get these debts forgiven, but we know they are open for business. If you have ever been to the DMV, I would assume be patient and await a case worker assigned to your case. I cannot fathom that they won’t be swamped with requests, but who knows exactly as the government has a funny way of keeping us all guessing.
In summary, the steps look like this:
- Once you apply you will receive an email confirmation.
- Your loan servicer will review your application.
- They’ll contact you if they need additional information.
- You will get notified once you are officially approved.
- Your loan servicer will apply for your debt relief and notify you.
There is a full list of details and FAQ on this site https://studentaid.gov/manage-loans/forgiveness-cancellation/debt-relief-info which I found very helpful in keeping up to date on questions. All-in-all the process seems fairly straightforward and simple. I know the floodgates are now open, but do not let that slow you down as the sooner you get relief the better.
I hope you found this helpful, or know someone that will. Here to help in any way we can, as always. Until next time stay wealthy, healthy, and happy!
If you prefer to watch our blogs, here is the video version:
