American President Joe Biden introduced the student loan forgiveness relief plan on 24th August 2022 to bring relief to the borrowers of educational loans. The declaration was made after the government noticed the impact of education loans on students. Several low and middle-income families have been left with no other choice than to borrow educational loans. As per the Department of Education, typically an undergraduate student graduates with $25,000 in debt. Hence, the student loan forgiveness plan was launched. Keep reading to know more about the student loan forgiveness program, its deadline, and the application process.
Table of contents
- What is the Student Loan Forgiveness Application?
- Student Loan Forgiveness Application Eligibility Requirements
- Student Loan Forgiveness Application Process
- Steps to Apply: Biden’s Loan Forgiveness Plan
- How Long Does It Take for Student Loan Debt To Be Forgiven?
- Student Loan Forgiveness Application Status
- Student Loan Forgiveness Application Deadline
- FAQs
What is the Student Loan Forgiveness Application?
The student loan application process has been launched by the U.S. government to bring relief to student borrowers of loans. It includes a 3 step plan that delivers the promise made by the Biden administration. The goal is to cancel $10,000 of debts of middle and low-income borrowers.
- To provide debt relief to address the harms caused by the pandemic
- Making student loans manageable for both current and future borrowers. It includes cutting in half the undergraduate education loans.
- To fix the PSLF (Public Service Loan Forgiveness) program. The step involves proposing a rule that would allow loan forgiveness for individuals who have worked at a non-profit organization, the federal government, the military, state, tribal, or the local government
- Lastly, the aim is to protect the future taxpayers and students by reducing the college education cost. The step also involves holding the schools accountable whenever the prices are increased.
Student Loan Forgiveness Application Eligibility Requirements
The student loan forgiveness application eligibility requirements are as follows:
- Applicants who have taken a federal student loan from the Direct loan program. For example, Direct Subsidized loans, parent PLUS loans, graduate PLUS loans, or consolidation loans.
- Applicants who have taken an educational loan before 30th June 2022
- Lastly, applicants who earn less than $125,000 (INR 1.03 Cr) per annum as a single filer. Student loan forgiveness is also granted to households with an annual income of less than $ 250,000 (INR 2.06 Cr).
Student Loan Forgiveness Application Process
The Student Loan Forgiveness Application process varies on the basis of the program:
- PSLF application Process
The PSLF application process requires the candidate to submit the PSLF and TEPSLF (Temporary Expanded PSLF). It can be done by the PSLF help tool immediately to ensure you are making the qualifying payments. Additionally, the applicant can submit the form every year to keep a copy of the records. After completing 10 years of service, the applicant can submit a final PSLF form that has been certified by the current employer. The form has to be sent to the MOHELA or the federal loan service provider that is responsible for administering the PSLF program.
- Teacher Loan Forgiveness
After finishing 5 years of service, a teacher can submit a Teacher loan Forgiveness application to the loan provider. However, for this to happen certification by the CAO of school or agency is mandatory. Applicants who are applying for loan forgiveness from multiple service providers need to submit a new form for each one.
- NURSE Corps program application process
Applicants need to create an account on the Health Resources and Services Administration (HSRA) customer portal to apply for the NURSE Corps program. Make sure to review the guidelines before filling out the application. For more information, reaching out to the loan service provider is the right way to make the student loan application process go smoothly.
Also Read: What Are The 7 Steps Of The Loan Origination Process? Read To Know!
Steps to Apply: Biden’s Loan Forgiveness Plan
No automatic procedure is set up to forgive loans. Students who want their loans to be forgiven need to apply for the same by following the steps below:
- Visit the Federal Student Aid website
- Fill out the application details such as the applicant’s name, social security number, phone number, date of birth, and email address.
Also Read: Education Loan Insurance: Benefits, Calculator, Programs, Cost, Importance
How Long Does It Take for Student Loan Debt To Be Forgiven?
The time required to forgive student loans depends on the rules of the program. We have listed the estimated duration of loan forgiveness depending on the program.
| Program | Loan Forgiveness Duration |
| PSLF | 10 years of public service |
| Teacher Loan Forgiveness | 5 years of teaching in a school |
| NURSE Corps loan forgiveness program | 2 years of commitment in an underserved area |
| Income-driven plan | 20-25 years |
| Biden’ loan forgiveness plan | 4 weeks to 6 weeks |
Student Loan Forgiveness Application Status
The steps the applicant has to take on the basis of the student loan forgiveness application status are as follows:
- Review period: When the student loan forgiveness application is being reviewed the applicant may have to pay the loans. However, it depends on a variety of factors such as the type of forgiveness, and the cancellation of the loan.
- Approved Application: When the applicant status has been approved he/she no longer has to pay the education loan to the service provider. Applicants whose only a part of the loan is waived need only a portion of the loan. Do note that, in some cases, the loan may be refunded.
- Denied Application: Applicants whose student loan forgiveness application has been rejected need to pay back the student loan. The agreed amount by the debtor needs to be paid back in due time.
Also read: NSFDC Education Loan: Eligibility, Application Form, Interest Rate, Benefits
Student Loan Forgiveness Application Deadline
The student loan forgiveness application deadline is as follows:
| Program | Deadline |
| Public Service Loan Forgiveness | October 31, 2022 |
| Teacher Loan Forgiveness | October 31, 2022 |
| NURSE Corps loan forgiveness program | February 23, 2023 |
FAQs
Ans: Private student loans are not eligible for student loan forgiveness. Hence, in this case the student needs to repay back the amount.
Ans: To improve your chances of getting student loan forgiveness carefully review the eligibility criteria. Next, make sure that you are filling in for PSLF every year. By submitting the form the applicant can be aware if he/she is eligible for student loan forgiveness.
Ans: Applicants whose student loan forgiveness has been accepted need not repay the loans. The U.S government would pay off the educational loans on behalf of the student.
The student loan forgiveness application allows students to be relieved of the education debt. Approximately, 26 million borrowers have applied for the education loan forgiveness plan. Currently, the application can be made offline and was placed under the Supreme Court. To discover more articles like this one, visit the study abroad experts at Leverage Edu and Fly.Finance.
