Biden administration alerting borrowers in line for automatic student debt relief
The Education Department is notifying an estimated 8 million student loan borrowers of their eligibility to have up to $20,000 of their loans automatically canceled under President Biden’s debt relief plan.
Those borrowers, whose income information the department has on file, will not have to apply like the vast majority of people seeking to have their debts canceled. They either recently filled out the federal financial aid form, or FAFSA, or are enrolled in an income-based loan repayment plan.
Those eligible for automatic relief can opt out of the debt cancellation program by Nov. 14 by contacting their student loan servicer. If they fail to bow out, the department will process the relief after Nov. 14, according to the agency. Borrowers eligible for automatic relief can fill out an application if they want the cancellation processed sooner.
White House officials say it always was the administration’s intention to give borrowers the option of taking part in the president’s program. The issue gained attention last month after a conservative lawyer in Indiana filed a lawsuit to block the program, claiming debt cancellation would force him to pay higher state taxes because Indiana plans to tax federal debt relief as a form of income.
White House press secretary Karine Jean-Pierre dismissed that claim, pointing out to reporters that “anyone who does not want to get debt relief can opt out.”
A federal judge denied the Indiana lawyer’s request for a preliminary injunction in that case, citing the opt-out provision. The lawyer unsuccessfully appealed the decision.
The Education Department’s outreach to borrowers eligible for automatic relief comes a day after Biden officially launched the application for one of his signature economic programs. The department opened the form over the weekend as part of a beta test, hoping to find and remedy any glitches on the site. Eight million people had applied to date, the president said Monday.
Who is eligible for student loan forgiveness?
- President Biden’s new plan will cancel some of the federal student debt held by millions of Americans.
- Borrowers can qualify for up to $10,000 in student loan forgiveness, and recipients of Pell Grants are eligible for an additional $10,000 in forgiveness.
- Want to calculate your eligibility? See how much of your loan debt can be forgiven.: https://wapo.st/DebtCalculator