Everything you need to know to get student-loan forgiveness

In this week's Personal Finance Insider newsletter, how, where, and when to apply for federal student-loan forgiveness.

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Here's what: The student-loan forgiveness application is live

After lawsuits, and beta testing, and much hand-wringing, the Biden administration's student-loan forgiveness application is live and available to federal borrowers. For millions of Americans, $10,00 to $20,000 of forgiveness is in sight.

So what happens now? You should fill out the application ASAP if:

• You have student loans that were disbursed on or before June 30, 2022
• Your loans are owned by the federal government (check this list to see if yours qualify)
• And you earn $125,000 or less per year, or $250,000 a year for couples if you are married and file your taxes jointly with your spouse

You have until December 31, 2023 to apply. If you already filled out the application while it was in beta mode, you don't have to apply again. You'll get an email if your application is approved.

There are a few things you should know

First of all, several lawsuits facing the Biden administration are ongoing. A couple have already been thrown out, but there's potential for others to result in significant delays or holds on Biden's plan. 

That said, the Biden administration has advised borrowers to apply as soon as possible — ideally before mid-November (i.e. next month) to get $10,000 worth of loans forgiven (or $20,000 if you received a Pell Grant) before student-loan payments resume in January 2023. 

Also, no one knows exactly how this process will play out. The idea is for borrowers to apply, get approved fairly quickly, and then for student loan servicers to apply the forgiveness directly to individuals' accounts; you should get an email when the change is made. With so many agencies and players involved, though, there may be bumps in the road.

All this to say: Student-loan forgiveness is complicated, and there's a possibility it could remain complicated for a while. A judge in Wisconsin, for example, who tossed one of the lawsuits filed against the plan, said that, despite his ruling, Biden's plan could still be found to be an overreach and a future administration could undo the forgiveness. 

So get your application in and keep an eye on the news. And don't fall for any scams — there's only one way to apply, and it's on the federal student aid website.

And if $10,000 to $20,000 of forgiveness won't wipe out your balance, make a plan to start paying again in January.

— Stephanie Hallett, senior editor of Personal Finance Insider

More on student-loan forgiveness

How to fill out the student-loan forgiveness application

Here's what to expect from the application and the info you'll need to have on hand to fill it out.

Biden's student-loan forgiveness plan could lower my monthly payment from $370 to $150. Here's exactly how I did the math.

Insider reporter Leo Aquino's current federal student loan balance is $35,590 with a 5% interest rate. A financial planner helped them figure out what forgiveness could mean for their budget.

Refinancing your student loans can get you a lower interest rate, but you'll lose access to Biden's forgiveness plan

The headline here: If you qualify for forgiveness, don't refinance your federal student loans right now.

All your questions about applying for student-loan forgiveness answered

Still have questions about forgiveness? We'll help you understand if your loans qualify and more.

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