Biden’s student loan forgiveness application will go live any day now. Here’s how to prepare

The U.S. Department of Education has said its application for student loan forgiveness will go live in early October, suggesting it could be ready any day now.

With legal challenges to President Joe Biden’s historic move to cancel up to $20,000 in debt for millions of Americans mounting, experts say borrowers should move quickly when the form launches.

“If a borrower receives forgiveness, they may get to keep it even if the court blocks the president’s plan,” said higher education expert Mark Kantrowitz.

Here are the steps you should take to get ready for the application.

Biden announced in August that most federal student loan borrowers will be eligible for some forgiveness: up to $10,000 if they didn’t receive a Pell Grant, which is a type of aid available to low-income undergraduate students, and up to $20,000 if they did.

The relief will be limited to borrowers who make less than $125,000 per year, or married couples or heads of households earning less than $250,000.

Review your recent tax returns to confirm your income fell below those thresholds in 2020 or 2021 (either will work). The Education Department of will be considering people’s so-called adjusted gross income, or AGI, which may be different than your gross salary.

To confirm your AGI for 2020 and 2021, look for line 11 on the front page of your federal tax return, known as Form 1040. 

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Big picture, the vast majority — roughly 37 million borrowers — will be eligible for forgiveness based on their loan type because their debt is under what’s called the William D. Ford Federal Direct Loan Program. That includes Direct Stafford Loans and all Direct subsidized and unsubsidized federal student loans. Under the Direct program, Parent Plus and Grad Loans are also eligible for the relief.

However, some borrowers with commercially held Federal Family Education Loans (FFEL) may unfortunately be excluded from the jubilee. Borrowers can check if they have one of the these loans at Studentaid.gov. Sign in with your FSA ID and then go to the “My Aid” tab to search for your loan details.

If you’ve concluded that your income level and loan type don’t exclude you from the Biden administration’s forgiveness, you’ll next want to figure out whether you qualify for $10,000 or $20,0000 in relief.

That comes down to whether or not you received a Pell Grant in your undergraduate years.

To learn if your financial aid package in college included a Pell Grant, check your account on Studentaid.gov. Again, under the “My Aid” section the grant should show up. Most recipients come from families with incomes of less than $60,000, Kantrowitz said.

If you received the grant for only one year, you’ll still qualify for the $20,000 in cancellation.

Before you apply for loan cancellation, experts say you should take screenshots and keep a record of your current loan amounts.

That way you can make sure your new balance is accurate and that you got the full relief to which you’re entitled. If there are any problems, you can take it up with your student loan servicer.

If you have questions for your servicer about forgiveness, reach out as soon as possible, experts say.

“Loan servicers are likely to be inundated with questions starting a few days before the deadlines,” Kantrowitz said.

You’ll also want to make sure your servicer, as well as the Education Department, has the most recent contact information for you. You can make sure that data is current at StudentAid.gov.

This will make sure you don’t miss any important information on the forgiveness process.

Lastly, the Education Department has said that until the application for loan cancellation is ready, borrowers can sign up on its website for updates.

Already borrowers have been told they won’t need to upload any supporting documents or use their FSA ID for the form.