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Student Loan Forgiveness application and calculator: who is eligible and when will my payment arrive?

President Biden has offered widespread student debt relief for more than 40 million Americans and the application process is now open.

Update:
Texas Court blocks Student Loan Forgiveness plan
BloombergGetty

The long-awaited student loan forgiveness program, one of President Biden’s flagship campaign pledges, went live on Monday with the formal launch of the federal application process.

After 18 months in office, Biden announced a sweeping initiative to eliminate up to $20,000 from the student loan debt of around 43 million borrowers.

But the relief will not come automatically and borrowers have until the end of 2023 to claim their support or miss out. Here’s everything you need to know…

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How to apply for Student Loan Forgiveness

To be eligible for the support you simply need to have eligible federal student loans and to satisfy the income requirement. For a single filer that means earning no more than $125,000, or $250,000 for couples who file jointly.

The recently-opened application process allows borrowers to fill in a few basic personal and employment details to claim up to $20,000 in debt relief. Federal Student Aid anticipates that the process will take up to six weeks from submitting your application to the reduction being credited on your account.

To apply for your support, use Federal Student Aid’s Student Loan Debt Relief portal.

The relief can be claimed on any debt you had accrued up to 30 June, 2022. Any new loans issued from July onwards will not be eligible for this form of support. However there are a number of alternative relief programs, such as Public Service Loan Forgiveness (PSLF), which can be found on the Federal Student Aid website.

Student Loan Forgiveness calculator

The eligibility requirements for Biden’s raft of relief are incredibly straight forward. Providing you meet the income requirements you will be entitled to either $10,000 or $20,000 worth of debt relief, up to the total amount of your outstanding student loan liability.

All borrowers who satisfy those criteria are entitled to $10,000 of relief, with Pell Grant recipients given an additional $10,000.

Pell Grants are awarded to students from low-income backgrounds who may otherwise be unable to cover the cost of a college education. Biden was eager to ensure that students from less privileged backgrounds benefitted most from the forgiveness.

Once you have completed your application you will receive a message from the Federal Student Aid, confirming the amount of forgiveness you are eligible for.

Federal Student Aid also offers assistance for borrowers in the form of a student loan repayment calculator, which will help you to better organise your finances. You may be able to lower your monthly student loan repayments or arrange a structure to allow you to clear your debts more quickly, therefore reducing the amount of interest you accrue on the loan.