Student loans

What to Know About Applying for Federal Student Loan Forgiveness

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The U.S. Department of Education said its student loan forgiveness application would go live “in early October.”

Yet we are almost halfway through the month and borrowers still cannot apply.

Still, the White House has shared new information about what people can expect from the form. Here’s what we know so far.

1. The app is still expected to go live in October

The White House continues to say the form will be available this month; however, it will not start canceling loans until after October 23, a delay caused by the the ongoing legal challenges that have been filed against the Biden administration’s plan.

2. No documentation will be required

According to the Biden administration, borrowers will be able to certify that they qualify for the discount and they will not need to attach proof to their application.

The relief is limited to people who earned less than $125,000, or married couples or heads of households who earned less than $250,000, in 2020 or 2021.

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Review your recent tax returns to confirm that your income fell below these thresholds in any of these years. The Department of Education will take into account the so-called Adjusted Gross Income, or AGI, which may be different from your gross salary. To confirm your AGI for 2020 and 2021, locate line 11 on the first page of your federal tax return, known as Form 1040.

The White House also says borrowers won’t need their FSA ID to apply for forgiveness and can request cancellation on a desktop or mobile phone.

You will need to provide your social security number.

3. Some borrowers may need to verify their income

Although you are not asked to prove your income on the main waiver application, some borrowers may later need to provide documentation if requested by the Department of Education.

The department will verify that a number of borrowers have told the truth about their eligibility as a fraud prevention measure.

However, more than 90% of those in debt are below income limits, according to higher education expert Mark Kantrowitz.

4. Those who lie could face heavy penalties

The Higher Education Act imposes fines of up to $20,000 and up to five years in prison for fraud and misrepresentation involving federal student aid, Kantrowitz said.

“In addition, a borrower who lied on the form could be subject to wire fraud or mail fraud. [charges],” he said.

5. Forgiveness can come in weeks

Ministry of Education says after a borrower applies for forgiveness, they will get relief within six weeks.

Experts recommend people apply as soon as the form goes live so that when student loan bills start up again in January, they won’t have to make payments if their debt has been wiped out entirely or larger payments than needed. if they end up with a smaller balance.