Student Loan Forgiveness Timeline: When Will You Really Get Debt Relief?
Now that student loan forgiveness is a reality, borrowers want to know: How soon will their debts be forgiven?
On Wednesday, President Joe Biden announced a $10,000 student loan debt forgiveness plan for borrowers with annual incomes below $125,000 (or below $250,000 for married couples or heads of families). family). Recipients of the Pell Grant will receive $20,000 in pardons, according to the administration. The plan also extends the pause on student loan repayments until December 31, 2022.
The move comes after months of back-and-forth at the White House — including fears that the pardon could further worsen inflation — and speculation over whether Biden would fulfill his campaign promise to cancel. certain student loan debt.
But just as Biden’s promise was murky, so is knowing when, exactly, borrowers can expect the student loan forgiveness to actually happen.
Here’s what to expect regarding the timing of the Biden administration’s plan to relieve borrowers of certain loan debts.
Student Loan Forgiveness Timeline
Just because an announcement was made today doesn’t mean your loans are automatically cancelled.
The Department for Education says it will announce more details on how and when borrowers can claim this relief “in the coming weeks”. Information regarding the request for forgiveness will be made available no later than the end of the year, when the federal loan repayment pause ends, according to a department press release on Wednesday.
“In the coming weeks, the Department of Education will detail a short and simple form to request this relief,” Biden said at a press conference Wednesday afternoon.
A fact sheet released by the White House says “the Department of Education will work quickly and efficiently to put in place a simple application process for borrowers to apply for relief.”
If the Department already has information about your income from income-based reimbursement plans, you may be eligible to automatically receive relief. There are nearly 8 million borrowers in this camp, according to the press release.
Since it’s not clear exactly when you’ll receive student loan forgiveness advice, it’s important that your information – like your address and email address – is up-to-date with your loan provider. (You can find out who exactly your student loan provider is via the Department of Education website.)
There will likely be months between the announcement and actual change for borrowers, says Lanae Erickson, senior vice president of social policy, education and policy at think tank Third Way. Also, when borrowers have to actively apply for something, it takes a long time, she told Money earlier this week.
“It’s going to be a long road,” Erickson said.
Biden could face possible legal action
There’s also the added complication that Biden’s plans could be challenged and overturned in court – which concerns Erickson.
Robert Kelchen, professor and head of the department of educational leadership and political studies at the University of Tennessee, Knoxville, weighed in on the possibility of Twitter.
“Let the lawsuits begin against presidential authority,” Kelchen wrote. “I wouldn’t count on a pardon for a while, and it could go all the way to the Supreme Court.”
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