Monday’s formal launch by President Joe Biden of the federal application to forgive student loans was announced. This is the latest phase in his plan, which will provide relief for as many as 43,000,000 borrowers.
“Today, millions of working people and middle-class people can apply for this relief. It’s easy and it’s happening now. It’s simple,” Biden, along with Education Secretary Miguel Cardona, said at the White House. This website is an important step forward for millions of Americans, and it was a huge effort to create it in such a short amount of time.
Students can fill out Studentaid.gov’s form in English and Spanish to request student debt relief. This form provides information about the debt relief process, who is eligible, and how it works. The form asks for applicants’ full names, Social Security numbers, dates of birth, telephone number, and email addresses. Borrowers can submit their applications until December 31, 2023.
In August, Biden announced that he would cancel $10,000 of student loan debt for those earning less than $125,000 per year and $20,000 for eligible borrowers who are also Pell Grant recipients.
To be eligible, borrowers must have federal student loans. Federal PLUS loans, which can be borrowed by parents or graduate students to pay for their undergraduate degrees, may be eligible.
Biden’s administration stated that applicants with higher incomes than the cutoff will need to provide additional information such as a tax transcript. While borrowers won’t have to pay federal income taxes on student loan debt forgiveness some borrowers might have to pay state income taxes on the amount forgiven.
The Department of Education also stated that it had income information on nearly 8 million borrowers. This is likely due to financial aid forms and income-driven repayment plan application submissions. If they meet the income requirements, those borrowers will automatically be eligible for debt relief. The department stated that it would email those borrowers who are eligible for debt relief, but they don’t have to apply.
This is the next stage of a hugely technical project for federal agencies and student loan servicers that will provide wide relief to tens of millions of borrowers. Biden stated that over 8 million Americans filled out applications on the website’s beta version over the weekend.
Biden credited “a talented team of data scientists, engineers across the federal government”, who “built, tested, and launched this new app in just weeks.” He said that the website handled more than 8,000,000 applications without any glitches or difficulties.
He said, “As millions of Americans fill out the applications, we’re going make sure that the system continues working as smoothly as possible to deliver student loan relief to millions of Americans as fast and efficiently as possible.”
The Department of Education faces several lawsuits challenging its student loan forgiveness policy. After hearing the motion for a preliminary order last week, a US district judge could decide to temporarily stop the program’s implementation. This could prevent student loan cancellation from taking effect until the judge makes a final decision.
Biden answered a question about litigation that had been raised regarding the plan at the end of his comments. He said he believes the administration’s plan would stand up in court. Biden also attacked Republican critics of his student loan relief plan, calling their outrage “wrong” and “hypocritical”.
“I will never be ashamed of helping the working Americans and middle-class as they recover from this pandemic. He said that the Republicans who voted in favor of a tax cut of $2 trillion in the previous administration primarily benefited the richest Americans and the biggest corporations, and didn’t pay for any and created the deficit.
Borrowers who have federal student loans that are guaranteed by the government and held by private lenders are exempted at the moment, unless the borrower applies to consolidate the loans into Direct loans before September 29.
In the beginning, the Education Department stated that these privately held loans would be eligible to receive the one-time forgiveness action. But six Republican-led states sued Biden’s administration in September. They argued that forgiving privately held loans would financially harm states and student loan servicers.