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Biden’s student loan aid application will open any day. Here are 5 steps to prepare.

President biden’s plan Erasing up to $20,000 in student loans will require millions of borrowers to complete an application to receive approval, a step that will likely be available in days.

The application will open in October and will be a “short online application”, the Education Department said on September 29, although it did not specify when exactly the form would be published. In the meantime, borrowers can take a few steps to ensure they are prepared to complete the form when it is published.

Because the plan only covers certain types of debt, and some borrowers will be able to take advantage of higher forgiveness limits than others, borrowers should make sure they understand their loans and what they qualify for before completing an application, experts say. Even if you have everything ready to apply, there can be glitches, as millions of borrowers are likely to flood the site when the application goes live, said Melissa Byrne, executive director of WeThe45Million, an activist group of borrowers who lobbied for the debt relief. .

“I’m sure the Biden Administration is 100% on it, to provide relief, but it’s a very large system,” Byrne said. “Everyone wants their immediate relief.”

There’s also a potential roadblock to Biden’s relief effort that borrowers should watch out for: a legal challenge.

A federal judge is expected to rule on a lawsuit against Mr. Biden’s student debt plan from six states led by the Republican Party for Oct. 12, Washington Post reporter Danielle Douglas-Gabriel told CBS News. If the judge imposes an injunction tailored to Biden, she “can create a gridlock or stop this policy,” she said.

The lawsuit, filed in September by the attorneys general of Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina, argues that taxpayers should not be shouldering the debt of other Americans who chose to go to college and now They can not afford it. your loans

“Everyone will be watching over the next week to see what will come out of that case,” Douglas-Gabriel said.

In the meantime, here are 5 steps you can take now to prepare for the application.

Sign up for an app alert

First, sign up for an alert from the Department of Education that will let you know when the app is live. This can be done in Department of Education subscription page. Check the first box, which is labeled “NEW!! Updates for Federal Student Loan Borrowers.”

Don’t forget to monitor your email and spam filters for updates from the Department of Education, Byrne noted. “Be chained to your inbox in case you get a communication,” she added.

Check if you are a beneficiary of a Pell Grant

People who received Pell Grants to finance their education can receive up to $20,000 in debt relief, double the $10,000 in forgiveness available to everyone else.

Pell Grants are awarded to low-income students, but Byrne noted that some borrowers may not know if they received one, especially if their parents filled out the Free Application for Federal Student Aid, or FAFSA, for them. FAFSA is the financial aid application required to receive loans, financial aid, and grants.

“There are a lot of people who don’t even know it because their parents could have handled it and they were 17 or 18 years old,” he noted.

To check, go to StudentAid.gov and sign in to your Federal Student Aid account. In your dashboard, look for “My Help” and then the Grants and Loans section, which will provide you with the data.

Determine if your loans are covered

The Biden administration’s plan covers federal loans, which means you have to check that your loans qualify. Private student debt will not be part of the discharge.

And the Biden administration recently changed his guide to remove some student loans from forgiveness eligibility, a major change as the Department of Education makes final preparations to launch debt relief applications.

Starting September 29, borrowers with student loans through the Federal Family Education Loan (FFEL) Program Y Perkins Loans Those who have not yet consolidated their debt into direct loans will now no longer be able to do so and will no longer be eligible for federal debt relief, the Department of Education now says.

These programs, although guaranteed by the federal government, are run by private institutions. Borrowers with FFEL and Perkins loans who applied for consolidation in the direct loan program before Thursday will continue to be eligible for debt relief.

Gather income data

The program is limited to individuals who earned less than $125,000 or married couples with earnings less than $250,000.

The program will use your adjusted gross income, or AGI, which is a figure that reflects your gross income minus some adjustments like student loan interest, according to the IRS. You can find that figure on your tax return (Form 1040) on line 11.

Check your AGI for 2020 and 2021, because the Biden administration said it will consider any year.

“Everyone should find out what their AGI is for those years, even if it’s a penny under $125,000 for individuals or a penny under $250,000 for married couples, they’ll qualify,” Byrne noted.

Mark November 15 on your calendar

The Department of Education is alerting borrowers to apply by November 15 to get debt relief before the student loan payment pause ends on December 31.

If you don’t apply by then, all is not lost: The deadline to apply for loan forgiveness is December 31, 2023, and the education department says it will continue to process applications as they are received, even after Payments resume in January. .

But if you want to make sure your payments reflect loan relief from January, apply before November 15.

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