Student Loan Repayment: Don’t Miss These Four Dates
(NEXSTAR) – As many as 43 million Americans are expected to see all or part of their federal student loans canceled by the Biden administration in the coming weeks.
If you qualify, there are a few dates to be aware of to ensure you receive your loan relief.
According to the US Department of Education, nearly 8 million borrowers could qualify for automatic student loan forgiveness based on data the department already has. For the remaining approximately 35 million borrowers, an application is required to qualify for relief.
The exact date this application will open has not been released, but the Education Department says you can expect it “by early October 2022”. This will initially be an online form with a paper version made available “at a later date”.
You can sign up to be notified when the app is available through the Department of Education by completing this form.
To receive your student loan forgiveness before the payment break ends (more on that in a moment), the Department of Education recommended exemption request before November 15.
This will ensure that you receive your loan receipt before regular payments resume and interest begins to accrue.
Officials say borrowers will see the discount applied to their loan balance within four to six weeks of completing the application.
January 1, 2023
If your entire loan balance won’t be cleared – which is likely for some 23 million borrowers – President Biden has extended the payment break until the end of the year.
But on January 1, 2023, interest will begin to accrue again and regular payments will resume. He indicated that the break would no longer be extended.
December 31, 2023
From now on, borrowers will have until the end of 2023 to apply for this one-time student loan forgiveness, according to the Department of Education.
Exact details on how the federal debt cancellation will be administered have yet to be released. We know that the type of loan and your income impact your eligibility for loan relief, and you could see up to $20,000 in rebate.
Once you have applied for and been approved for student loan relief, the Education Department says your loan officer will notify you when the relief has been applied to your account.
In addition to student loan forgiveness, the Biden administration proposed a new rule to be changed to create a new income-based repayment plan that will significantly reduce future monthly payments for low- and middle-income borrowers, and proposed long-term changes to the Public Service Loan Forgiveness Program.