4 key things student-loan borrowers should watch out for after applying for Biden’s debt cancellation

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  • Student-loan borrowers can now officially apply for up to $20,000 in debt cancellation.
  • But after submitting the form, borrowers should keep track of follow-up notices from the Education Department.
  • The department might request additional documentation to confirm eligibility for relief.

Applying for President Joe Biden’s student-loan forgiveness is the easy part — what comes after is key to ensuring millions of borrowers actually get the relief.

On Monday, Biden and Education Secretary Miguel Cardona officially launched the application for student-debt relief, and they delivered on the promise of making the form “simple and straightforward.” It should take less than five minutes to do — borrowers just need to fill in basic contact information, like their names and Social Security numbers, to receive up to $20,000 in loan forgiveness. The Education Department will take it from there, notifying borrowers if it requires any additional documentation to ensure the applicant’s income is under the $125,000 threshold. 

“My commitment if elected president was to make government work and deliver for the people,” Biden wrote on Twitter. “Bringing student loan debt relief to folks that need it most as they recover from the pandemic and prepare to restart loan payments keeps that commitment.”

 

But while the form is simple, the implementation process is key, and borrowers should ensure that the Education Department, along with the companies that service their loans, are handling the process accurately and effectively.

Here are four things all borrowers should look out for after they apply for debt relief, according to Federal Student Aid:

  1. You should receive an email confirmation after submitting your application. Save that confirmation because your studentaid.gov account will not show the status of your relief.
  2. The department will review your application to confirm your eligibility. If it doesn’t have enough information to do so, you should receive an email with instructions on how to provide any additional documentation. You may receive a follow up if the department needs more information to verify your income, if you were enrolled as a dependent student in the past year and the department needs your parent’s income, or if your loans are determined ineligible.
  3. Once your eligibility is confirmed, the department will notify you. It will determine how the debt relief will be applied to your loans — this is how that will be determined — and the department will provide that information to your loan servicer.
  4. Your loan servicer will apply the debt relief to your account. If you have multiple servicers, each one of them will notify you of this change separately and will let you know if your loans are paid in full, or if you still have a remaining balance. If the latter is the case, your servicer will also alert you to your new monthly payment once payments resume in January 2023.

If you do not receive an email requesting additional information, you’ve done your part and should just keep an eye out for notices that your debt relief has been processed. So far, over 8 million borrowers have already applied for relief “without a glitch,” Biden said on Monday, and his administration will continue to ensure the process rolls out “as smoothly as possible.”

Read the original article on Business Insider
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