Everything you need to know about applying and getting the student debt relief

Michael Rosenbaum, Editor-in-Chief

The Biden administration has announced its plan to help relieve student debt. The application process for students, both past and present, to access this relief is relatively simple. The amount of debt relief available to each student is up to $10,000 for all borrowers and $20,000 for Pell Grant recipients. The student debt relief plan is part of a wider effort to reinvigorate the national economy in the wake of the COVID-19 pandemic, and to reduce the effective cost of higher education nationwide. 

This article is the synthesis of information already available publicly, but sometimes complexly displayed or difficult to find. 

How to apply for debt relief.

The application for debt relief is super easy, and short. The website for debt relief lists the time required to submit an application at approximately five minutes. Based on the experience of the writer, this is a high estimate assuming you already know all of the information that you’ll be asked. This includes name, address, and most critically, your social security number and your annual income. Your social security number is important because it is the identification number that most student loans are associated with, along with your name. The annual income is important because it determines your eligibility to receive relief. It is advised not to submit an application if your income is above the income levels laid out. For an individual, their annual income must not exceed $125,000. For a married couple who do their taxes together, their annual income must not exceed $250,000.

While the debt relief also covers alumni, current students should still apply. The same debt relief is available for borrowers who are currently dependents. They are most likely to count, for the purposes of the application, as individuals, barring differences in their personal finances. So, as long as their annual income is below the $125,000 mark, students are also eligible for relief. Since it’s likely that most students aren’t making as much as $125,000 per annum, all students should make sure that they apply. 

Dependent students might have to jump through more hoops in the future, but that’s currently unclear. The Department of Education, upon the completion of an application, advises dependent students (those who were enrolled as dependent students between July 1, 2021 and June 30, 2022) that they are likely to require more information about an applicant’s parents income. 

If any other documents are required, or the information submitted on the application does not match the information that the Department of Education has on record, they are also likely to contact the applicant. As such, applicants should monitor the email address they provide on the application to make sure they are up to date on any information that the Department of Education requires. If information requests are ignored, it’s almost certain that one’s debt relief application will be rejected; the deadline for that information is March 31, 2024 per the application

What are the deadlines for debt relief? 

The most pressing deadline is for PSLF applications; credit requests are currently more flexible. The deadline for that is October 31. There is an entire section in this article on PSLF forgiveness. 

The end of the pause on student loan repayment is December 31. At this time, the halt on student loan payments will end. This is not the same as the end date for the application for student debt relief. However, after December 31, payments on student loans will automatically resume. 

With that said, what is the best way to capitalize on the December 31 resumption of payments? By reducing the amount that you owe before payments become due and interest on the debt piles up. The estimated amount of time that it will take for an application to be reviewed and for the borrower to be contacted is said to be six weeks. It’s unclear if that will be a feasible turn-around for the Department of Education. However, if it is, then six weeks before December 31 is November 19. November 19 might be a helpful deadline if one works better with deadlines.

Final date for applications for debt relief is December 31, 2023. This is a long way out, but if one wanted to accrue more debt that would be eligible for relief before then, the end of December 2023 would be the last time that they could apply for relief. 

The last deadline is for requests for more information from the Department of Education. It’s unclear how these will be handled, but it seems clear from this that the government is not trying to make the deadlines too tight or bureaucratize the process too much.

October 31 is the PSLF deadline

December 31 is the end of the pause on 

6 weeks is the expected wait time for applications to be reviewed.

6 weeks before December 31 is November 19

Application for student debt relief is December 31, 2023

March 31, 2024 for additional information

Payments on current loans to resume in January.

As part of the government response to COVID-19, there has been a halt on payment of student loans (from either a public or private lender) as long as the borrower had any federal loans. The pause on student loan repayment began March 13, 2020, under the Trump administration, and carried into the Biden administration. This most recent repayment pause has been labeled as a “final extension.” The extension has postponed the deadline until December 31. Borrowers do not need to do anything to take advantage of the extension. It applies automatically. 

What are you entitled to?

If you are a borrower of student loans making an annual income below $125,000, you are eligible for debt relief. The $125,000 annual income is the lowest benchmark for relief, so if you make less than that, you could be covered. Double the income benchmark if you are married. 

But exactly how much relief is each individual entitled to? The number $20,000 has been floated in news on the subject, but most people will only be entitled to $10,000 in relief. It is only if you are a Pell Grant recipient that you are eligible for the additional relief. While many Union students receive some form of need based aid, Pell Grants are distributed on the federal level. 

The “up to” part of the relief can also be confusing. This means that the amount of relief that one receives is limited by the amount of student debt they still have. If you only have $6,000 of debt for instance, you will not receive all $10,000 that you would otherwise be entitled to. Someone with $17,000 of debt would receive the full amount. There seems to be no other limiting factor, so one won’t arbitrarily be granted $6,000 in relief if they meet the other criteria.

Private loans are not eligible for debt relief. 

Public Service Loan Forgiveness (PSLF) relief added flexibility.

The deadline for this is October 31, making it the tightest deadline for debt relief.. PSLF is a form of relief for government employees working at the state, federal, and tribal level, as well as some eligible NGOs. While the PSLF is not a new program, borrowers can receive credit for past payments that wouldn’t normally be accepted under the PSLF application process.