- Advertisement -

President Biden’s plan to eliminate up to $20,000 in federal student loan debt per borrower will require millions of Americans to submit an application that could be available as early as this week.

- Advertisement -

The White House said the app will open sometime in October and will be short and accessible online.

It is not yet clear when exactly the form will be launched. White House press secretary Karine Jean-Pierre said this week that “a date has yet to be set,” but she confirmed that the film is slated for release this month.

- Advertisement -

Biden’s decree cancels $10,000 student loan debt for individual borrowers who earned less than $125,000 in 2020 or 2021 (or married couples who earned less than $250,000 per year in the same years). If an eligible borrower also received a Pell Grant while in school, they are eligible for up to $20,000 in debt relief.


However, the plan attracted flurry of lawsuits as it was announced in late August, prompting the Biden administration to make some last-minute changes to the program. Borrowers are still waiting for final details at the last minute, and it’s possible that a judge could issue a ban on the program.

The Department of Education regularly updates Federal website for student assistance, where he will first share the details of the loan forgiveness program.

In the meantime, here’s everything borrowers need to know:

How to apply for the program?

Since the app is down, it is still unclear how to apply for the program. However, the Department of Education has said that borrowers will not need to upload any supporting documents or use their federal student ID to apply.

“Once you submit an application, we will review it, determine your eligibility for debt relief, and work with your lenders to process your write-off,” reads a recent email to borrowers. “We will contact you if we need any further information from you.”


Borrowers will have over a year to apply, with the program officially closing in December 2023.

President Biden eases student loans

You can sign up for Department of Education subscription page to be officially notified when the app is released.

Will the money be taxed?

While loan forgiveness will not count towards federal taxable income, at least six states will consider it taxable, according to the Tax Foundation, a non-profit group that advocates lower taxes.

This includes Arkansas, California, Indiana, Minnesota, Mississippi, North Carolina, and Wisconsin, which appear to be about to tax student loan forgiveness.

Can I opt out of the program?

An estimated 8 million federal student loan borrowers are automatically forgiven under the one-time cancellation plan.

However, borrowers can opt out if they prefer.

The White House changed the matter after the borrower sued and said he would end up paying more government taxes on the amount repaid than if he paid off the balance on his loan.

Graduates of 2022 in New York

How much will student loan forgiveness cost?

In a report released last week, the non-partisan Congressional Budget Office estimated that Biden’s student loan plan could cost about $400 billion, although he called this figure “highly uncertain”. Other reports put the figure closer to $500 billion (Committee on a Responsible Federal Budget) or about $300 billion (Penn Wharton).

Debt cancellation will also add to the country’s already rising public debt, which rose to a record high of $31 trillion this week.

Who benefits from a student loan write-off?

According to recent findings by Penn Wharton’s Budget Model, a non-partisan group at the University of Pennsylvania’s Wharton School, the benefits of the executive order will mostly go to the top earners.

The analysis shows that between 69% and 73% of any debt forgiven will go to households that are in the top 60% of incomes in the US.