WASHINGTON -- Within days, millions of Americans are expected to be able to take their first steps to cancel up to $20,000 in debt under President Joe Biden's federal student loan forgiveness program -- a multibillion-dollar initiative cheered on by advocates but which already faces legal challenges.
The Biden administration announced in August that single borrowers who earn under $125,000 can qualify for $10,000 in federal school loan debt cancellation while those who are married qualify for that amount if their joint income is under $250,000 (as calculated by gross adjusted income from 2020 or 2021).
Recipients of Pell grants -- which are designed for people with "exceptional financial need," according to the government -- are eligible for an additional $10,000 to be canceled, or $20,000 total.
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Of the 43 million federal student loan borrowers who have accrued more than $500 billion in debt, most will need to fill out an application to see if they qualify for forgiveness. Only about 8 million of those borrowers will automatically have their debt canceled, according to the White House, because the Department of Education already has their income information.
On Thursday, the Biden administration quietly excluded some borrowers of Perkins loans and Federal Family Education Loans (FFEL). Both groups formerly qualified for loan cancellation. While some 4 million Americans in total have these loans, an administration official told ABC News that only about 770,000 people will be affected by the change.
At a Sept. 26 briefing, White House press secretary Karine Jean-Pierre said there would be additional updates on the application process "very soon." The administration maintains that the "simple process" will open in early October.
Outside experts are more skeptical of how smoothly the program will run.
"When you see the huge numbers that the administration projects will benefit from this initiative, that all depends on people being able to take these steps and have that debt relief applied to their account in a way that actually works," said Mike Pierce, executive director of the Student Borrower Protection Center, an advocacy group.
Here are the key dates and details, so far, for applying for student loan forgiveness
Early October: Loan forgiveness applications open
Applications for student loan cancellation will be released in early October, according to the DOE, though a more specific date has not yet been confirmed. The DOE launched a beta application on October 14, encouraging people to apply so they can refine their process.
The department is recommending that everyone file an application, even those who might already qualify for automatic forgiveness.
To be notified when the process has officially opened, the department recommends borrowers sign up at their subscription page. (Private companies like Navient and Nelnet, which help administer the loans and repayments, are likewise referring borrowers to a government portal created to share updates on student loans.)
It's unclear how many of the 43 million borrowers will submit applications. In cost estimates, the White House has said it could be as many as 75% of eligible people or as few as 50%.
"It will all depend on how good we are getting the word out about this opportunity and making sure that people actually do raise their hands to get in the line to get their debts canceled," Pierce said.
Nov. 15: The recommended deadline to apply
DOE officials recommend that borrowers apply for student loan forgiveness by Nov. 15 in order to receive relief before the pandemic-era payment pause expires on Dec. 31 and interest begins accruing again.
The department said they expect a four-to-six-week turnaround for forgiveness.
However, some advocates like Pierce worry that may not be feasible, given the track record the federal government has with processing debt relief.
The DOE has not released details regarding a plan for borrowers whose applications are still being processed by the time the payment pause lifts after December.
Jan. 1: Student loan payments resume
Jan. 1 is when regular student loan payments will resume after a three-year moratorium first enacted under President Donald Trump during the onset of COVID-19. If a borrower's entire balance is not erased by the federal forgiveness program, interest will begin accruing again on the remaining sum.
Dec. 31, 2023 : The program application sunsets
The application period for student loan forgiveness will close on Dec. 31, 2023.