Student loan forgiveness applications now formally open, Biden says

By Maegan Vazquez, Sam Fossum and Betsy Klein, CNN

President Joe Biden on Monday announced the formal launch of the federal application for Americans seeking student loan forgiveness, the latest phase of his plan that is expected to provide debt relief to as many as 43 million borrowers.

“Today, I’m announcing millions of people working and middle-class folks can apply and get this relief. And it’s simple and it’s now. It’s easy,” Biden said in remarks from the White House alongside Education Secretary Miguel Cardona. “This is a game changer for millions of Americans … and it took an incredible amount of effort to get this website done in such a short time.”

Individuals seeking to apply for student debt relief can now fill out the form in English or Spanish at Studentaid.gov. The form includes information on the debt relief, who qualifies for it and how it works. It asks applicants for information including their full name, Social Security number, date of birth, phone number and an email address. Borrowers have until December 31, 2023, to submit an application.

Biden in August announced his decision to cancel up to $10,000 in student loan debt for individuals making less than $125,000 a year or as much as $20,000 for eligible borrowers who were also Pell Grant recipients.

Borrowers must have federally held student loans to qualify. In addition to federal Direct Loans used to pay for an undergraduate degree, federal PLUS loans borrowed by graduate students and parents may also be eligible if the borrower meets the income requirements.

The Biden administration has said that applicants who are “more likely to exceed the income cutoff” will be required to submit additional information, like a tax transcript. And while borrowers will not have to pay federal income tax on the student loan debt forgiveness, it’s possible that some borrowers may have to pay state income tax on the amount of debt forgiven.

The Department of Education has also said it already had income information for nearly 8 million borrowers, likely because of financial aid forms or previously submitted income-driven repayment plan applications. Those borrowers will automatically receive the debt relief if they meet the income requirement, unless they choose to opt out. The department has said it will email borrowers who will be considered for debt relief but don’t need to apply.

The formal launch of the application marks the next phase of a massive technical undertaking for federal agencies and student loan servicers to provide broad relief to tens of millions of borrowers. A beta version of the website was launched on Friday evening and Biden said over 8 million Americans used the website over the weekend to fill out their applications.

The President credited “a talented group of data scientists and engineers across the federal government” who “built and tested and launched this new application in just weeks.” In the few days of beta testing the application, Biden said, the website “handled more than 8 million applications without a glitch or difficulty.”

“As millions of people fill out the application, we’re going to make sure the system continues to work as smoothly as possible so that we can deliver student loan relief for millions of Americans as quickly and as efficiently as possible,” he added.

The Department of Education is facing several lawsuits challenging the student loan forgiveness policy. A US district judge could soon decide whether to temporarily block the program from taking effect after hearing a motion for a preliminary injunction last week. That could put student loan cancellation on hold until the judge issues a final ruling on the case.

Asked at the end of his remarks about litigation challenging the plan, Biden said he thinks the administration’s plan will hold up in court. He also took aim at Republican critics of his student debt relief plan, calling their outrage “wrong” and “hypocritical.”

“I will never apologize for helping working Americans and middle-class people as they recover from the pandemic. Especially not the same Republicans who voted for a $2 trillion tax cut in the last administration, mainly benefited the wealthiest Americans and the largest corporations and didn’t pay for a penny of it and racked up the deficit,” he added.

Borrowers whose federal student loans are guaranteed by the government but held by private lenders, many of which were made under the former Federal Family Education Loan program and Federal Perkins Loan program, are currently excluded — unless a borrower applied to consolidate those loans into Direct loans by September 29.

The Education Department initially said these privately held loans would be eligible for the one-time forgiveness action — but reversed course in September when six Republican-led states sued the Biden administration, arguing that forgiving the privately held loans would financially hurt states and student loan servicers.

Asked by CNN’s MJ Lee about those with privately held loans being ineligible for the mass relief, Cardona said the administration is “moving as quickly as possible to provide relief to as many people as possible.”

This story has been updated with additional reporting.

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CNN’s Katie Lobosco contributed to this report.