Student loans

What to do while waiting for student loan forgiveness

A student walks to class at Rice University in Houston on August 29, 2022.

Brandon Bell | Getty Images News | Getty Images

Student loan forgiveness application will be ready by early Octobersays the US Department of Education.

Once people applied, they could see relief within six weeks.

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While borrowers wait for the app to launch and forgiveness to occur, there’s at least one big move they’ll probably want to avoid.

“Don’t refinance your federal loans if you expect to receive a forgiveness,” said higher education expert Mark Kantrowitz. That’s because private student loans aren’t eligible for forgiveness, he said.

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The White House said federal student loan borrowers will be eligible for up to $10,000 in student loan forgiveness if they do not receive a Pell Grant, which is a type of aid available to undergraduate students at low income, and up to $20,000 if they did. Relief is also limited to those earning less than $125,000 a year, or married couples or heads of households earning less than $250,000.

Even if you owe more than you expect to be forgiven, consumer advocates are wary of the benefits of refinancing your student debt because of the added protections that come with federal loans.

But there are several other smart steps borrowers should take in the coming days, experts say.

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You also don’t want to assume that student loan forgiveness won’t really happen or that you don’t qualify for it, they add. Here’s an overview of five steps you can take while you wait.

1. Make sure your contact details are up to date

Although a number of Republican lawmakers could take legal action against President Joe Biden’s landmark plan, no lawsuit has yet been filed and there’s no way to know how any action would play out. In the meantime, experts encourage borrowers to prepare to apply as soon as they can.

While waiting for your student loan to be canceled, you will want to update your contact information with your loan officer and at StudentAid.govKantrowitz said.

This will ensure that you don’t miss any important information or deadlines.

2. Confirm your income qualifies

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3. Check your loan details

Most federal student loans are eligible for forgiveness. However, there are about 5 million borrowers with older student loans, known as Federal Family Education Loans (FFELs), which are actually held by private companies. (You can check your loan type on by logging in with your FSA ID and going to the “My Help” tab.)

The Department for Education says it is working to ensure borrowers with FFEL loans held by businesses also get the forgiveness, even if it does not hold the debt. But if you have these loans and want to make sure you’re included in the forgiveness as soon as possible, you might want to consolidate them into the main federal student loan program.

You also need to check if you received a Pell grant to determine if you’re eligible for the full $20,000 cancellation, Kantrowitz said.

4. Beware of scams

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While you wait, be on the lookout for one of the most common student loan scams, said Abby Shafroth, attorney at the National Consumer Law Center. No one should charge you for asking for forgiveness and don’t give out any personal information to someone who calls you out of the blue, Shafroth said.

5. Contact your loan manager if you have any questions

If you have any questions for your repairer about the end of the payment break or discount, contact them as soon as possible.

In addition to Biden’s student loan forgiveness announcement, he also extended the payment pause on federal student loans until December 31. This was the seventh extension of the pandemic-era relief policy launched under the Trump administration and it will likely be the last.

“Loan servicers are likely to be inundated with questions starting days before maturities,” Kantrowitz said.