Student loan forgiveness program launches beta version application

(ABC 6 News) – A “beta test” of the application for student loan relief is now live.

The test application is a first step of the policy announced in late August, allowing people with federal student loans to apply for up to $20,000 of debt relief, depending on what kind of financial aid they received and how much money they make.

During the beta testing period, according to a Department of Education spokesperson, borrowers will be able to submit applications for the student debt relief program and won’t need to reapply if they submit their application during the beta test.

This period will help the department monitor the application site’s performance through “real-world use” ahead of the official application launch later this month, the department says it can refine processes and uncover any possible bugs.

The highest amount of debt relief — up to $20,000 — will go to people who received Pell Grants for college, a type of aid given to students from low-income families. All other borrowers with federal loans will qualify for up to $10,000 in relief.

The relief covers anyone who made less than $125,000 in the 2020 or 2021 tax year, or less than $250,000 as a couple.

Borrowers should apply before mid-November in order to see their loans canceled by the time the pause on student loan payments lifts on Jan. 1, 2023, the White House has said. That pause has been in place since the beginning of the pandemic.

The application for debt relief will also close at the end of the year on Dec. 31, 2023.

The beta application can be found by CLICKING HERE.

However, there are a subset of borrowers who were ruled out of the program in a late change by the Biden administration. Anyone with a Perkins loan or a Federal Family Education Loan — both loans that are guaranteed by the federal government but handled by private banks — can no longer get aid.

The Biden administration estimated that the rule change, made in late September, disqualified about 700,000 people from the policy.

The administration has pointed out that it was a small minority of people compared to the potential reach this policy could have.

The policy is expected to apply to 43 million Americans, and 20 million could have their debt completely wiped out, the White House estimates. It’s expected to cost around $400 billion over 30 years, according to the Congressional Budget Office.