As the final days of the federal student loan moratorium loom the federal government and the U.S. Department of Education have began to issue guidance on how the process for student loan forgiveness will look like. However there is still much that is unclear as tens of millions of Americans wait with bated breath on how to navigate the complexities of this process
Here are key dates to remember and some potential pitfalls to keep a look out to avoid.
On Aug 24th of this year it was announced by President Biden many borrowers of federal student loan debt will be eligible for $10,000 in loan forgiveness for any individual borrower with earnings under $125,000 per year, or $250,000 for married couples or heads of households. and up $20,000 worth of forgiveness for borrowers who have received a Pell Grant.
It has been announced that they anticipate to have a simple application available in early October. To begin the process of receiving forgiveness, make sure you fill out your application as early as possible as soon as it’s available.
It has been advised to apply for forgiveness no later than the date of November 15th. It is forecasted that it takes about six weeks to get a cancellation after they apply.
Those who want to have their balances reduced or erased before the moratorium on payments ends on December 31st should keep this date in mind. This is the best way to avoid having to make payments.
The current and final payment moratorium is set to end on December 31st of this year. It is also expected to be the final pause placed on federal loan repayment. So it is important to reach out to your loan services as soon as possible as that date is quickly approaching.
Lastly, December 31, 2023, is expected to be the final date to apply for forgiveness. That gives any individual who meets the requirements for forgiveness a little more than 1 year to complete the application.
Do not miss the opportunity to take advantage of this one-time cancellation!
Savvy individuals and families finally should be on the lookout for scams. The Federal Trade Commission has also issued guidance on a number of scams that have popped up looking to take advantage of anxious debtholders confused by the opaque nature of the incomplete patchwork of guidance measures.
To get more information please check the FTC’s website for scam alerts and sign up on studentaid.gov to subscribe for updates/alerts and receive the most accurate information.
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