Student Loan Forgiveness Timeline: When Will You Actually Get Debt Relief?
The story has been updated to reflect new information shared Friday.
Now that student loan forgiveness is a reality, borrowers want to know: What's the timeline for their debts to be cancelled?
Earlier this week, President Joe Biden announced a plan to cancel $10,000 in student loan debt for borrowers whose annual income is less than $125,000 (or under $250,000 for married couples or heads of households). Pell Grant recipients will receive $20,000 in forgiveness, according to the administration. The plan also extends the pause on student loan payments to Dec. 31, 2022.
The move comes after months of back and forth in the White House — including the concern that forgiveness would make inflation even worse — and speculation around whether Biden would fulfill his campaign promise to forgive some student loan debt.
But just as Biden's promise was murky, so is an understanding around when, exactly, borrowers can expect student loan forgiveness to actually happen.
Here's what to expect about the timing of the Biden Administration's plan to relieve borrowers of some loan debt.
Student loan forgiveness timeline
Most borrowers will have to fill out an application to receive forgiveness.
On Friday, administration officials said during a press briefing that an application should be available in early October. Once submitted, the process will take between 4 and 6 weeks, so the administration is recommending borrowers apply by Nov. 15 so that, in theory, their loans can be forgiven before payments resume next year.
In press conference earlier in the week, Biden told reporters that the application would be a "short and simple form," while the Education Department has said it will announce more details on how and when borrowers can apply "in the weeks ahead."
If the department already has your income information from income-driven repayment plans on file, or if you recently filled out a FAFSA, you may be eligible to automatically receive relief. There are nearly 8 million borrowers in that camp, according to the news release.
Since there's currently little official guidance published from the White House or the Education Department, the most important thing borrowers can do for now is check that your information — like your address and email address — is up to date with your loan servicer. (You can determine who exactly your student loan provider is via the Education Department's website.) You can also sign up to receive email updates on loan forgiveness here. (Select 'Federal Student Loan Borrower' updates.)
There will probably be months between the announcement and an actual change for borrowers, says Lanae Erickson, the senior vice president of social policy, education and politics at think tank Third Way. Plus, when borrowers have to actively apply to get something, it takes a long time, she told Money earlier this week.
“It’s going to be a long road," Erickson says.
Biden could face possible lawsuits
There’s also the added complication that Biden’s plans could be challenged and struck down in court — something Erickson is concerned about.
Even if the plan isn't ultimately struck down, a lawsuit could delay forgiveness until after the pandemic-driven payment pause ends in December.
Robert Kelchen, a professor and head of the department of educational leadership and policy studies at the University of Tennessee, Knoxville, weighed in on the possibility on Twitter.
“Let the lawsuits begin over presidential authority,” Kelchen wrote. “I wouldn't count on forgiveness happening for a while, and it may go to the Supreme Court."
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Student Loan Forgiveness: Here's Who Qualifies Under Biden's Plan