President Joe Biden announced to provide up to $20,000 in debt relief to Pell Grant recipients with loans held by the Department of Education.
And up to $10,000 in debt relief to non-Pell Grant recipients. Borrowers are eligible for this relief if their individual income is less than $125,000 or $250,000 for households.
The student loan forgiveness formal
application is live and available online
. It takes only 5 minutes to fill up the application form.
Student Loan Forgiveness Application Form 2022
No login and documents are required for this. You should apply for your student loan debt relief application today itself and no later than 31 Dec 2023.
For those who can’t apply online
, a paper version of the form will be available soon by the end of 2023 to apply.
You can apply only if you have loan balances before June 30, 2022. The new loans disbursed on or after July 1, 2022, are not eligible for debt relief.
The court has given a stay order to the Biden administration and instructed them not to act on the programmme while it considers the appeal.
The lawsuit against student loan debt forgiveness
You are eligible If your annual income is below $125,000 (for individuals) or $250,000 (for married couples or heads of households)
Who qualifies for student loan forgiveness
If you had received a Pell Grant in college and meet the income threshold, you will be eligible for debt relief up to $20,000.
If you had not received a Pell Grant in college and meet the income threshold, you will be eligible for debt relief up to $10,000.
“As of Sept. 29, 2022, borrowers with federal student loans not held by the U.S. Department of Education
obtain one-time debt relief by consolidating those loans into Direct Loans,”
“Consolidation loans comprised of any FFEL or Perkins loans not held by the Education Department are also eligible, if the borrower applied for consolidation before Sept. 29, 2022.
The U.S. Department of Education Administration
will launch a simple application in October for borrowers
whose income data is not available.
How to apply for student loan forgiveness
Approx. 8 million borrowers may be eligible to receive relief without applying since their income data is available with the U.S. Department of Education.
Please sign up at the Department of Education subscription page
to get notified when the application is open in October.
Borrowers are advised to apply by mid-November in order to receive relief before the payment pause expires on December 31, 2022.
What is the deadline for student loan forgiveness?
The U.S. Department of Education will continue to process applications even after the pause expires on December 31, 2022.
Forgiven student loans aren’t taxable. A provision in the 2021 American Rescue Plan Act exempted student loan forgiveness from taxation until 2025.
Is student loan forgiveness taxable
However, in some states, you may be required to pay state income tax on canceled student loan debt.
Student loan forgiveness will not be subject to income tax in Michigan
Six Republican-led states filed lawsuit in an effort to block student loan forgiveness plan from taking effect.
Lawsuit against student loan debt forgiveness
The lawsuit was filed in a federal court in Missouri by state attorneys general from Missouri, Arkansas, Kansas, Nebraska and South Carolina, and Iowa.
Read What is Pell Grant below
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