Student Loan Forgiveness: Why More Than 7 Million Borrowers Won’t Get Assistance
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Josephine Nesbit
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Melanie Grafil
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The application for student loan forgiveness is expected to go live within days, but some consumer advocates say this could cause millions of borrowers to miss out.
“Those who need it the most won’t get it, and it will make the policy more regressive,” said Thomas Gokey, co-founder of the Debt Collective, as reported by CNBC. “There will be a higher percentage of people making $124,000 a year who apply than people making $30,000.”
According to an estimate by the U.S. Department of Education, nearly 20% of qualifying borrowers may not take the necessary steps to get that relief because they believe their income disqualifies them. Education expert Mark Kantrowitz explained to CNBC that this comes out to more than 7 million people.
Individual student loan borrowers may qualify if they made less than $125,000 in 2020 or 2021, or married couples or heads of households who earned under $250,000.
However, The White House reported that nearly 8 million student loan borrowers may be eligible to receive relief automatically because income data is already available to the Department.
Kantrowitz also explained to CNBC that some borrowers may have outdated contact information with their student loan servicer and are not getting updates about the relief.
If you’re unsure if you qualify, certified financial planner Douglas Boneparth told CNBC that it’s best to still apply. “There’s no downside to that. But if they qualify, they could receive relief, and that can be huge.”
According to a Twitter post by Secretary of Education Miguel Cardona, the application will launch by early October. Once borrowers complete the application, relief can be expected within four to six weeks. Borrowers should fill out the application by Nov. 15 to receive relief before the payment pause terminates at the end of the year.
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