Cartoon character of a college graduate dragging a ball and chain while learning how to qualify for student loan forgivenessPresident Joe Biden recently announced student loan forgiveness that will impact as many as 43 million borrowers. According to the administration, roughly 20 million students will have their debt completely canceled. If you have student loan debt keep reading.

Who qualifies?

If you earn less than $125,000 annually ($250,000 for married couples who file jointly) you can qualify for up to $10,000 in student loan forgiveness. If you qualified for a Pell Grant while in college and also meet the income requirements, you qualify for up to $20,000 in loan forgiveness. Parent PLUS loans will also qualify for cancellation under the new policy. More information about loan forgiveness will be released in the coming weeks.

How do you sign up?

Borrowers will complete a simple application that will be launched in early October. You can sign up at StudentAid.gov/DebtRelief to be notified when the application is available. According to officials, borrowers can expect debt relief 4-6 weeks after completing the application, so apply by Nov. 15 to receive relief before the loan payment pause ends on Dec. 31.

What about the student loan payment pause?

When the White House announced loan forgiveness, they also extended the student loan repayment pause through Dec. 31, 2022. Keep in communication with your loan servicer to stay current with your student loan. If you qualify for debt relief and made payments on your loans after March 18, 2020, you can request a refund of those loan payments.

Is this a done deal?

It’s possible that student loan forgiveness will be challenged in court. Perhaps anticipating legal pushback, the Biden Administration published its legal rationale at the same time it announced debt cancellation. The administration cites the Heroes Act, which gives the Education Secretary the power to grant relief from student loan requirements during specific situations – in this case, financial harm caused by the Covid-19 pandemic.

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By Jeannine Phelan