Student management

Student Loan Forgiveness: Are You Automatically Eligible?

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The Biden administration is trying to make it as easy as possible to get debt relief for federal student loan borrowers of up to $20,000, after recently launching an online loan forgiveness application that can be completed in a matter of minutes. minutes and an awareness campaign to inform borrowers of the process. For around 8 million borrowers, relief will be automatic – and no application will even be required.

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Indeed, these borrowers’ income information is already on file with the US Department of Education, meaning they won’t have to apply for canceled loans, The Washington Post reported. These borrowers have recently completed the Federal Financial Assistance Form (FAFSA) or are enrolled in an income-based loan repayment plan.

Eligible borrowers will receive emails from the Department of Education providing details of automatic relief options. Agency officials advised borrowers to be wary of companies offering help with student loan forgiveness in exchange for payment.

As previously reported by GOBankingRates, the loan forgiveness application process officially kicked off with a beta test over the weekend. By Monday, millions of borrowers had already applied.

Federal student loan borrowers with an adjusted gross annual income of less than $125,000 in 2020 or 2021 — or $250,000 for households — will be eligible for up to $10,000 of forgiven debt. Those who received Pell Grants will be eligible for up to $20,000 in forgiven debt.

As many as 40 million Americans could benefit from this plan. The vast majority will need to go to the Department of Education’s Federal Student Aid website to complete the application, where they will be asked to provide personal information and confirm that they are requesting relief and meeting the eligibility criteria.

This is not the case for those who can be automatically registered, however. As WaPo reported, if automatic enrollees do not opt ​​out, the Education Department will process their relief after Nov. 14. Borrowers eligible for automatic relief can complete an application if they want the cancellation to be processed sooner.

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Some borrowers may be reluctant to accept debt relief amid reports that in some states canceled debt will count as taxable income. The Department of Education even faced lawsuits to block the loan cancellation plan due to its potential tax implications.

However, White House officials countered that the plan is voluntary and borrowers can opt out if they don’t want to participate.

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