Student Loan Forgiveness: 3 Key Dates To Mark on Your Calendar
Individuals who earn less than $125,000 and couples whose income is under $250,000 could be able to apply for up to $10,000 in federal student loan forgiveness. It doubles to $20,000 for Pell grant recipients. But whether or not borrowers are able to get loan forgiveness depends on the Supreme Court, which is currently deciding on the fate of the plan.
During the time the online application for student loan forgiveness was live, at least 26 million borrowers submitted applications and over 16 million borrowers were approved. But due to the Supreme Court’s debate over the plan, applications are no longer being accepted, and no relief has yet been provided to any applicants.
So what’s next? That depends in part on the Supreme Court’s decision. Still, it’s essential to know about a few key dates that are coming up.
The Supreme Court is expected to issue a final decision on the loan forgiveness plan by June 30. If the justices decide in favor, borrowers may start receiving student loan forgiveness within weeks. If the Court shuts down the program, relief goes out the window, and the Biden administration will be forced to reassess.
August 30 (or so)
President Biden’s extension of the student loan moratorium is set to end 60 days after either June 30 or the date that the Supreme Court rules on the student loan forgiveness plan, whichever comes first. Unless the Biden administration extends the pause again, federal student loan repayments would resume by around August 30.
Last year, the Biden administration announced the IDR Adjustment, a one-time initiative that will give millions of borrowers retroactive credit toward student loan forgiveness under income-driven repayment (IDR) plans. The Education Department will issue a one-time adjustment that will be applicable to past repayment periods, toward a borrower’s 20- or 25-year student loan forgiveness term. Even borrowers who aren’t currently in IDR plans can access this program, Forbes reported. The effective date for this initiative has changed a few times; it is currently scheduled for December 31.
Take Our Poll: What Do You Plan To Use Your Tax Refund For?
Get Your Paperwork in Order Now
Though applications for the student loan relief program are on hold, make sure that you have all relevant documents in hand by June 30 in case the court rules in its favor. Gather all student loan debt records available to support your request. Learn more about eligibility requirements here.
More From GOBankingRates
- 5 Expensive Renovations Homeowners Always Regret
- Financial Insight in Your Inbox: Sign Up for GBR's Daily Newsletter
- 3 Ways to Recession Proof Your Retirement
- 7 Things You Must Do To Create a Plan for Your Money
Andrew Lisa contributed to the reporting for this article.