When Biden’s student loan relief application officially went live early last week, we asked readers what questions they were still struggling with. There has been some confusion over which loans – and which borrowers – qualify. And it makes sense that borrowers want to get it right — the plan has the potential to impact the debt of more than 40 million Americans and completely wipe out the balances of around 20 million.
Some questions were easier than others, but NPR’s Education Desk answered a few of the most frequently submitted topics asked by readers.
How do I apply for student loan relief?
The app itself is simple. The US Department of Education has set up a website dedicated solely to this one-time relief. Applicants just need to go there and fill out the form. It will ask for your name, date of birth, social security number, phone, and email. You won’t need to create an account or upload any additional documents.
There is a box that borrowers must check off to certify, under penalty of perjury, that they meet the program’s income requirements: $125,000 for individuals or $250,000 for couples. If you met these requirements in That is 2020 or 2021 you qualify for relief
I have completed the application – what happens next?
After submission, borrowers will receive a confirmation email from the Department of Education that basically says, “Hey, we got it. Time to wait.”
Senior administration officials say the Department of Education will then check your eligibility using loan and income information it already has on file. It sounds vague because it is! The ministry revealed very few details about this process, but said it planned to report any discrepancies. Borrowers who are flagged may need to submit additional documents to verify their income.
But if you’re not reported, the department says you probably won’t hear from them until your application has been approved.
There’s no official timeline for when borrowers will find out whether they’ve been approved or not, but Education Secretary Miguel Cardona told NPR in September that he hopes to process as many applications as possible before the end of the federal student loan payment break on Jan. . 1.
There are lawsuits challenging the plan. Is it possible that any of them can prevent the Ministry of Education from canceling these debts?
It’s possible. Here’s what the scenery looks like on Friday morning:
The administration secured two court victories late last week. A case, filed by a group of Wisconsin taxpayers, was dismissed by the Supreme Court. The other, which legal experts told NPR was probably the strongest case against debt relief, was thrown out by a federal judge in Missouri. However, this decision was immediately appealed and within 24 hours a US appeals court ordered that the debt relief be temporarily suspended. It’s unclear how long it will take for this case, or any other that may arise, to resolve.
Legal experts who spoke to NPR have differing views on what would happen if the courts blocked the program after borrowers had already seen their debt reduced. Most agreed, however, that the administration would be highly unlikely to reinstate the debt.
What if I repaid part of my loans during the pandemic payment pause? Can I get this money back?
Advice from the Ministry of Education has been confusing. At first, the ministry suggested that borrowers should ask their service agents for a refund first and then ask for debt forgiveness. Now the guidelines say that borrowers with loans below the relief they are entitled to – either $10,000 or $20,000 – need only submit one application and the department says they will will take care of the rest. These borrowers can expect an automatic refund of payments made during the pause up to the amount of relief to which they are entitled.
The Ministry of Education gave an example in its guidelines:
Let’s say you qualify for $10,000 in debt relief. If you currently owe $9,500, this relief amount will be applied to your loan(s). If you paid $1,000 during the payment break, you will automatically be refunded $500, which is the remaining amount of your debt relief of $10,000.
Can I choose which loans are reduced first? What if I want a loan with a higher interest rate to take priority?
The ministry says it will apply relief to all defaulted loans first, then target loans with the highest interest rate first.
Officials say they are trying to prioritize loans that hurt borrowers the most.
What if I wait for the cancellation of the Public Service Loan, or PSLF? Should I just wait for this relief?
The short answer is don’t wait. Apply for relief even if you are still working towards PSLF.
And, while we’re on the subject, there’s an important deadline coming up for PSLF. Last year, the administration opened a waiver for borrowers working in civil service jobs to apply for the PSLF under new, more flexible regulations. This week, the Department for Education made some of those changes permanent, but says borrowers still need to apply for the waiver. It expires on Monday and is unlikely to be renewed. So, if you have the opportunity to qualify for the PSLF, apply here.
Are Federal Family Education Loans, or FFELs, eligible for relief under Biden’s plan?
FFEL loans held by private lenders are excluded from this loan relief plan. Not sure if your FFEL loans are eligible? A good litmus test is: did you have to keep making payments during the pandemic pause? Did your interest keep piling up? If the answer to either of these questions is yes, it is because your loans are still held by one of these private lenders and do not qualify. If your payments were suspended during the pandemic, you should be eligible. Only borrowers with loans administered by the Department of Education were eligible for the break.