Student loan forgiveness: Here are key dates for the loan payoffs

Those who qualify to take part in the plan to forgive federal student loan debt are waiting for guidance on how to start the application process, a process the Department of Education said would be ready to go “in early October.”

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However, as of Wednesday, there has been no announcement of a start date for the process that will cancel an estimated $390 billion in total debt for millions of borrowers.

According to Department of Education officials, details about the application process are being finalized.

In the meantime, here are some of the important dates we do know concerning the debt cancellation program.

Early October

The application process for those who qualify for the loan forgiveness program is set to open up soon, according to the DOE. Borrowers are being encouraged to pay attention to announcements that the application process has begun.

Borrowers should sign up at the Department of Education’s website to get updates on when the plan begins.

Nov. 15

Nov. 15 is the date federal student loan borrowers should have their application submitted by. According to Miguel Cardona, the director of the DOE, it will likely take around six weeks to clear a request to have the debt canceled and have it eliminated.

Borrowers should do that by Nov. 15 to avoid having to make a January payment on a loan when the pause on federal student loan payments ends on Dec. 31.

Dec. 31

Dec. 31 is the day the nearly three-year pause on federal student loan debts ends. If you have $10,000 or $20,000 in debt forgiven and still owe federal student loan debts, the collection process begins again after Dec. 31.

In August, Biden announced that federal loan borrowers who make less than $125,000 a year would have up to $10,000 of student loan debt forgiven and up to $20,000 in Pell Grant loans forgiven.

“All of this means people can start finally to climb out from under that mountain of debt,” Biden said in remarks from the White House. “To finally think about buying a home or starting a family or starting a business. And by the way, when this happens, the whole economy is better off.”

The plan brought praise from most Democrats and criticism from Republicans.

“Last week, we saw how, with the flick of a pen, President Biden took a giant step forward in addressing the student debt crisis by canceling significant amounts of student debt for millions of borrowers,” Senate Majority Leader Chuck Schumer said after Biden announced his plan in late August.

The Republican National Committee released a statement after the announcement calling the program “Biden’s bailout for the wealthy.”

Sen. Ben Sasse, R-Nebraska, said the plan “forces blue-collar workers to subsidize white-collar graduate students. Instead of demanding accountability from an underperforming higher-education sector that pushes so many young Americans into massive debt, the administration’s unilateral plan baptizes a broken system.”

The DOE has announced initial details of a proposed rule to create a new income-driven repayment plan that will substantially reduce future monthly payments for lower- and middle-income borrowers.

This proposed rule, according to a news release from the agency, will make “long-term improvements to existing student loan forgiveness programs and provide greater protections for students and taxpayers against unaffordable debts.”