• December 3, 2022

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This week, President Biden announced that the application for his new one-time student loan forgiveness initiative is fully live and active, following a brief beta testing period. Over 12 million borrowers have already applied for loan forgiveness, according to top administration officials.

Under Biden’s plan, 40 million student loan borrowers may be able to receive $10,000 or more in student loan forgiveness on federal student loans held by the U.S. Department of Education. This would include Direct Stafford loans, Direct PLUS loans for graduate students and parents, and Direct consolidation loans, as well as some (but not all) FFELP loans. To be eligible for the relief, borrowers must have earned under $125,000 in income (or less than $250,000 if they are married) in either 2020 or 2021.

Borrowers are scrambling to complete the simple online application, although the opportunity will be available until December 31, 2023 (unless a court blocks the plan in response to multiple legal challenges).

If you’re preparing to apply for this one-time student loan forgiveness under the Biden plan, don’t make these mistakes.

Don’t Falsely Certify You Meet The Income Criteria on the Student Loan Forgiveness Application

The student loan forgiveness application is simple and takes only a minute or two to complete. Borrowers do not have to log in, and no supporting documentation is required.

To qualify, borrowers must certify that they meet one of the following criteria:

  • You made less than the income threshold required to file federal taxes.
  • You filed as a single tax-filer AND made less than $125,000 in either 2020 or 2021.
  • You were married, filed taxes separately, AND made less than $125,000 in either 2020 or 2021.
  • You were married, filed taxes jointly, AND made less than $250,000 in either 2020 or 2021.
  • You filed as a head of household AND made less than $250,000 in either 2020 or 2021.
  • You filed as a qualifying widow(er) AND made less than $250,000 in either 2020 or 2021.

Borrowers must certify that they meet at least one of these criteria under penalties of perjury. While no proof of income is required with the application, the Education Department has indicated that it may subsequently request proof of income from millions of borrowers during the next year.

Providing false or inaccurate information on a federal form can lead to financial or even criminal penalties. So make sure you’re certifying accurate information. And if there’s any doubt, review your 2020 and 2021 tax returns first, before submitting the application.

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Don’t Let Someone Else Complete the Student Loan Forgiveness Application For You

As part of the online process for applying for student loan forgiveness, the person completing and submitting the form must certify that the person named as the borrower is the person completing, submitting, and certifying the form and the information it contains. That certification is also made under penalties of perjury.

This means that only the borrower can complete the student loan forgiveness application. No one should be completing this for you. The Education Department has warned borrowers about third-party scammers who may try to persuade borrowers to hire them to apply. Not only is this unnecessary (and could put you at of risk of incurring unnecessary fees or having someone steal your identity), it also could put you and the person completing the form for you at risk of civil or criminal penalties.

Don’t Consolidate Private FFELP Loans with Direct Loans After September 28

Importantly, only government-held federal student loans qualify for loan forgiveness under the Biden plan. This includes all Direct student loans, defaulted Direct and FFELP loans, and some FFELP loans that are held and administered by the Education Department.

Many FFELP loans are held by private, commercial lenders. The Biden administration had initially advised that these borrowers could consolidate their FFELP loans into a Direct consolidation loan to qualify for the one-time student loan forgiveness benefits. But following a series of lawsuits challenging the program, the Education Department abruptly revised its guidance to exclude privately-held FFELP loans from the relief.

According to the Education Department’s updated guidance, “Consolidation loans comprised of any FFEL or Perkins loans not held by [the Education Department] are… eligible, as long as the borrower applied for consolidation before Sept. 29, 2022.” However, other Direct consolidation loans are eligible only if “all of the underlying loans that were consolidated were [Education Department]-held loans and were disbursed on or before June 30, 2022.”

This essentially means that as of September 29, 2022, privately-held FFELP loans included in a new Direct consolidation loan application with Education Department-held loans could effectively “taint” that entire new Direct consolidation loan and render it ineligible for student loan forgiveness under the one-time Biden plan. Borrowers should be wary of this risk.

Top Education Department officials have indicated that they are working on solutions to allow privately-held FFELP loans to qualify for Biden’s one-time student loan forgiveness plan, but so far, there have been no major updates.

Further Student Loan Forgiveness Reading

Biden Launches Student Loan Forgiveness Application, Says 8 Million Have Already Applied

In Reversal, Biden Administration Announces New Eligibility Limits On Student Loan Forgiveness

5 Key Takeaways From The Sudden Change To Student Loan Forgiveness Eligibility

Only Two Weeks Left To Apply For Student Loan Forgiveness Under Expiring Waiver Program

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