How to prepare for student loan forgiveness, so you can apply as soon as possible

How to prepare for student loan forgiveness, so you can apply as soon as possible

Polina Lebed | istock | fake images

In just a few weeks, tens of millions of Americans will be able to apply for student loan forgiveness.

The US Department of Education has said the application will be ready in “early October.” Said your app it will be easyBut the federal student loan system is famously complicated.

As a result, experts say there are a number of steps you need to take now to prepare.

1. Calculate how much relief you may qualify for

The Department of Education will consider people’s so-called adjusted gross income or AGI, which may be different from their gross salary.

To confirm your AGI for 2020 and 2021, look for line 11 on the first page of your tax return, known as Form 1040.

If your income in either year fell below those limits, you should be fine.

2. Review your loan details

3. Contact your loan servicer (if necessary)

Once the application is ready, apply for relief as soon as possible

Borrowers should try to apply for forgiveness no later than Nov. 15, Kantrowitz said.

That’s because the Department of Education says it will take up to six weeks for borrowers to get discharged after they apply, and it wants their balance reduced or eliminated before the federal student loan repayment pause expires. the pandemic era on December 31. .

“If forgiveness erases your debt completely, you can avoid having to make payments on your student loans,” Kantrowitz said.

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