SPRINGFIELD, Ill. (WCIA) – More than 40 million people can now apply for student loan forgiveness. The federal Student Debt Relief Application officially launched Monday and borrowers could get up to $20,000 of their debt forgiven.
“Today, I’m announcing how millions, millions of people, working and middle class folks, can apply and get this relief. And it’s simple, and it’s now,” President Joe Biden said in a news conference Monday.
To apply, borrowers don’t need to provide any proof of income records, but they will need to give their name, date of birth and social security number.
Cody Hounanian, the executive director of the Student Debt Crisis Center, a national nonprofit that helps influence public policy on debt relief, said borrowers are getting relief unlike any other point in American history.
“With the application that was launched today, we are seeing an unprecedented benefit from the government be accessible through a simple online application,” Cody Hounanian, the executive director of the Student Debt Crisis Center, said. “I’ve never seen something this big, this accessible to the American public, and that’s how we guarantee that millions of everyday people can actually get the relief that they deserve.”
Individuals who made less than $125,000 in 2020 or 2021 along with families and married couples who filed jointly those years and made less than $250,000 will have $10,000 of their debt canceled. Pell grant recipients will get $20,000 wiped away.
Hounanian said the application takes minutes to complete and SDCC has yet to receive any complaints about the process.
“That is pretty much unheard of in the student loan world, because historically, federal student loan programs have been marred by poor rollouts, technical issues, complicated forms, [and] we aren’t seeing any of that,” Houanian said.
While borrowers don’t need to provide documentation to apply, they are asked to certify under penalty of perjury that they are providing the Department of Education with correct information. If the department does ask for documentation afterwards, borrowers must turn it over otherwise they won’t get relief.
For borrowers who made payments during the pause on student loan repayments and the current amount of debt they have is under the amount they’re expected to receive, the Department of Education will automatically refund that amount once they apply. They will only issue a refund up to the amount of debt relief they have left.
“For example, let’s say you’re eligible for $10,000 in debt relief. If you currently owe $9,500, that amount of relief will be applied to your loan(s),” according to the Department of Education’s website. “If you paid $1,000 during the payment pause, you’ll be automatically refunded $500—the remaining amount of your $10,000 of debt relief.”
Federal data shows almost a third of all borrowers have less than $10,000 in student loans. But Houanian said SDCC is still pushing for more debt relief.
“Even after the president’s plan, there will still be millions of Americans with some student loan debt,” Houanian said. “We need to continue to work on fixing the existing system for everyone moving forward.”
In his speech, President Biden warned borrowers to be aware of scams associated with debt relief.
“If you get a call pretending they’re from the government trying to help you with your loans let’s be clear, hang up,” Biden said. “You never have to pay for any federal help from the student loan program.”
Borrowers can apply for relief on the student aid website. The deadline to apply is Dec. 31, 2023.