Applications are surging for two of President Biden’s signature student loan forgiveness initiatives.
Yesterday, the Biden administration officially launched the application for his one-time student loan cancellation plan that will provide millions of borrowers with $10,000 or more in student loan forgiveness on their government-held federal student loans. Borrowers can apply until December 31, 2023, but many are rushing to complete the new online application after the Education Department successfully completed beta testing over the weekend.
Meanwhile, the window to apply for relief under the Limited PSLF Waiver program, which provides temporary retroactive flexibilities for borrowers seeking student loan forgiveness through the Public Service Loan Forgiveness (PSLF) program, is rapidly closing. The initiative ends on October 31, but the Education Department is still updating guidance on the initiative in response to new legislation.
Here’s the latest.
12 Million Borrowers Have Already Applied For Student Loan Forgiveness Under Biden Plan
According to President Biden on Tuesday, another four million borrowers have applied for one-time student loan forgiveness since his announcement yesterday. This is on top of the eight million borrowers who applied during last weekend’s beta launch.
The online application is easy to complete and straightforward, and most borrowers should be able to submit it within just a couple of minutes. Only basic contact information and personal details are required, and borrowers do not need to log in or submit any supporting documentation. They simply must certify that they meet the income criteria associated with the program.
The Education Department estimates that up to 40 million borrowers may ultimately be eligible for student loan forgiveness.
Automatic Student Loan Forgiveness Is Coming
When the administration first announced the one-time student loan forgiveness initiative in August, Education Department officials indicated that borrowers who already have income information on file with the department (for example, if the borrower recently applied for an income-driven repayment plan) could receive their student loan forgiveness award automatically, without needing to submit an application.
The Education Department has reportedly begun implementing the automatic student loan forgiveness process now. Borrowers who are eligible for automatic loan forgiveness will receive a notification if they qualify. They will also be given an opportunity to opt out of the relief, if they choose.
Borrowers Who Live Abroad Are Encountering Some Problems With Student Loan Forgiveness Application
Some borrowers who live abroad are reporting problems applying for student loan relief through the online application. Foreign IP addresses are apparently being blocked, which prevents these borrowers from accessing the application.
The Education Department is reportedly working on a solution. A paper application may also become available in the coming weeks, which these borrowers can use as a workaround if necessary.
FFELP Spousal Consolidation Borrowers Have a Path to Student Loan Forgiveness Through PSLF Waiver
Borrowers with FFELP Spousal Consolidation loans — an older kind of federal student loan that allowed married borrowers to combine their individual federal student loans — have been locked out of PSLF relief because federal law had prohibited these borrowers from re-consolidating their loans into a Direct consolidation loan. Direct loan consolidation is a necessary step for FFELP borrowers to qualify for loan forgiveness under PSLF, including under the Limited PSLF Waiver.
However, Congress recently passed legislation allowing FFELP and Direct Spousal Consolidation loans to be split and potentially reconsolidated into a Direct loan to qualify for PSLF relief under the waiver. This week, the Education Department updated its online Limited PSLF Waiver guidance to provide these borrowers with a path to loan forgiveness.
“If you have a joint consolidation loan, a specific process has been set up for borrowers with these loan types to be reviewed as a result of the new law,” says the Education Department. “This process requires you to submit a reconsideration request and attach your signed PSLF form,” rather than sending the PSLF form to MOHELA — the Education Department’s designated PSLF servicer.
Borrowers with joint spousal consolidation loans seeking PSLF relief should carefully review the Education Department’s updated guidance here.
No Indications There Will Be an Extension of Limited PSLF Waiver
Student loan borrowers advocacy groups have been urging the Biden administration to extend the Limited PSLF Waiver beyond the October 31 deadline, given broad concerns that many borrowers may lose out on the relief. But so far, the Education Department has given no indication that an extension is happening.
With only 13 days left before PSLF reverts back to its original eligibility rules, top officials are urging borrowers to take whatever steps are required to apply and benefit from the relief before the waiver opportunity ends. Borrowers should review the Limited PSLF Waiver’s eligibility rules and application procedures here.
Further Student Loan Forgiveness Reading
Biden Launches Student Loan Forgiveness Application, Says 8 Million Have Already Applied
Only Two Weeks Left To Apply For Student Loan Forgiveness Under Expiring Waiver Program
In Reversal, Biden Administration Announces New Eligibility Limits On Student Loan Forgiveness
5 Key Takeaways From The Sudden Change To Student Loan Forgiveness Eligibility