Student Debt Relief Applications Now Available to US Citizens

At the end of August 2022, US President Joe Biden fulfilled a campaign promise by announcing that the government would provide US citizens with student loan debt relief. US citizens can apply for up to $10,000 in debt relief under this loan forgiveness program. On October 17, 2022, the US Department of Education opened the call for applications for StudentAid.gov.

To qualify for debt relief, applicants must have an annual income of less than $125,000. Borrowers who receive a Pell grant are additionally eligible for an additional $10,000, giving a total possible amount of $20,000 in assistance (Pell grants are a type of need-based assistance designed for low-income students in the US).

Applications are available in English and Spanish and are very simple and easy to complete. The information required to apply for forgiveness is mostly simple demographic information and only takes a few minutes. Applicants do not have to dig through obscure documents, find original certificates, or even provide bank details.

As such, we recommend that all United States readers with outstanding student loan debt complete an application. It can be found on the U.S. Department of Education’s Federal Office of Student Aid website (StudentAid.gov), until the closing of applications on December 31, 2023.

Eligible borrowers living abroad are reporting difficulty applying as the official government website appears to prohibit access to the app on devices outside the US. If you’re experiencing similar issues, using a VPN to send the app seems to work. Also, the application is simple enough to allow a US friend or relative to apply for you, although you must provide valid contact information.

Student loan repayments were initially suspended during the COVID-19 pandemic due to the economic uncertainty caused by the pandemic. This suspension has since been repeatedly extended by the federal government. It is unclear whether debt relief will be available to borrowers by the time payments are scheduled to resume.

Arguments for and against debt relief

Opinions on student loan forgiveness are mixed. Supporters of the plan say it’s a step in the right direction to alleviate the massive amounts of federal student loan debt that plague US consumers.

According to ForbesU.S. outstanding student loan debt is approximately $1.75 trillion, of which 92% comes from federal loan sources. The average debt is $28,950. So Joe Biden’s plan for student debt relief will ease much of the burden on individuals. Supporters of the plan argue that the relief will allow consumers to spend their money on goods that can boost the economy.

Meanwhile, critics of the Biden plan argue that the aid would hurt the economy, exacerbating already existing inflationary pressures. Many also argue that debt relief is unfair to those who have already paid off their loans and people who have not taken out loans to fund their education. Ultimately, the burden of debt relief will fall on the shoulders of taxpayers, and people may be unhappy that their tax dollars are being used to reduce someone else’s debt rather than serve society as a whole.

Legal status of student loan debt forgiveness as of November 24, 2022

Following the announcement of the Biden forgiveness plan, a lawsuit filed jointly by the legislatures of six states (Kansas, Nebraska, Missouri, Arkansas, Iowa, and South Carolina) blocked the debt relief process. On November 14, 2022, a federal court extended a decision to bar the U.S. Department of Education from writing off debt. However, the decision comes after the U.S. Supreme Court refused to accept a separate debt relief lawsuit on Nov. 4, so it’s not clear if the plan will be blocked permanently.

Other similar lawsuits have been filed, mostly by right-wing politicians, who claim the aid is unconstitutional or will hurt the economy. While these legal issues have pushed back the initial issuance of the application and left the fate of debt relief uncertain, the Biden administration still encourages borrowers to apply.

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