It’s here.
The form to apply for President Joe Biden’s one-time student loan debt forgiveness is now online. Borrowers can submit their applications here.
The unveiling of the application – following a beta test that launched Friday and attracted 8 million applicants – suggests the federal government is confident it can deliver on its mammoth debt cancellation campaign promise in the face of several legal challenges, including from seven conservative states.
“It landed and handled more than 8 million applications without a glitch or any difficulty,” President Joe Biden said Monday during an announcement event, adding that the administration’s plan is “economically responsible.”
Borrowers are eligible to receive $10,000 or $20,000 in debt relief depending on their income and whether they received a Pell Grant in college. The Education Department has said borrowers who apply in October could have a chunk of their debt wiped out as soon as November. The feds have encouraged borrowers to file their forms by Nov. 15 if they want to see their balances shrink before the end of a freeze on payments that began during the pandemic and ends in January.
To apply, borrowers will have to provide their Social Security number and birthdate in the government’s online form. As part of that, they will self-attest that they earn less than $125,000 a year, or $250,000 for couples, and those who provide false information could face fines or jail time. Some borrowers may have to file proof of their income.
The application is available in English and Spanish and via desktop computer or cell phones. People who already applied once the beta version went live don’t need to apply again.
“My commitment was if elected president, I was going to make government work to deliver for the people,” Biden said. “This rollout keeps that commitment, just as I am keeping my commitment to relieve student debt as borrowers recover from this economic crisis caused by the once in a lifetime pandemic.”
When will student loans be forgiven? What to know about debt relief applications
More:Legal challenges stack up for Biden’s student debt forgiveness plan
First came lawsuits. Instantly, fewer could apply for loan forgiveness
About 43 million people hold $1.6 trillion in federal student loans, and about 40 million are expected to qualify for the one-time debt cancellation. But the loan forgiveness program, or at least the publicly available details about it, has evolved as the application window approached and legal challenges mounted. These changes mean fewer applicants can take advantage of the relief.
Assuming that most of the 8 million who have already applied are eligible for loan forgiveness, that would mean roughly 20 percent of the eligible pool already have signed up for relief. The White House previously estimated that about 75% of qualified borrowers would apply for debt forgiveness. Borrowers have through the end of 2023 to apply.
One group, the Pacific Legal Foundation, sued to stop mass cancellation on the grounds that borrowers living in some states would be unfairly taxed. But within days of that suit being filed, the White House said borrowers would be able to opt out of the debt relief plan. A federal judge in Indiana dismissed the group’s request to halt the forgiveness plan, saying the plaintiff couldn’t be injured if his debt wasn’t being forgiven.
More:Federal student loan forgiveness could be taxed as income in some states
Six conservatives states – Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina, filed a suit together, arguing Biden had overstepped his authority.
The states also said quasi-state agencies that service old student loans in the Federal Family Education Loan program would lose money. These loans are backed by the federal government but held by commercial banks. Until Sept. 29, the government had allowed borrowers to consolidate these loans into one loan owned by the federal government, meaning they would have a chance to be a part of the debt cancellation.
The states argue they would lose money because borrowers would collectively ditch their existing FFEL loans for those offered by the government. On the same day the lawsuit was filed, the federal government said any remaining FFEL borrowers could not consolidate their loans.
The federal government has said the new policy will cut nearly 800,000 borrowers from the debt forgiveness program, out of universe of nearly 4 million borrowers who have FFEL loans.
Education Secretary Miguel Cardona said Monday the administration is “working on pathways” to support private borrowers.
The state of Arizona also sued the Biden administration, arguing the widespread availability of debt relief would steer some borrowers away from the Public Service Loan Forgiveness program. That’s a government initiative meant to encourage workers to forgo the high wages in the private sector and opt for work in the public sector. After a decade in these roles, a borrower’s entire outstanding loan balance may be forgiven.
Other legal challenges were dismissed almost as quickly as they were filed. In Wisconsin, a conservative group attempted to stop the debt cancellation by arguing the president didn’t have the authority to cancel debt. It also claimed the White House intentionally crafted the program to benefit borrowers of color, which they say violated the constitution’s guarantee of equal protection of the laws. The suit was filed on Oct. 4th, and by Oct. 6th a judge had dismissed the case, saying the group didn’t have standing.
How much will the president’s student debt relief plan cost?
It depends on whom you ask. The federal government has estimated the plan would cost about $30 billion a year for the next 10 years, or $300 billion over the next decade. The Congressional Budget Office put that cost at about $400 billion over the next 30 years, though it added in a report that such measurements are “highly uncertain.” That model is based on 90% of eligible applicants filling out their forms, a high adoption rate that has raised some skepticism from the White House.
The Committee for a Responsible Federal Budget has estimated the debt cancellation will cost about $360 billion.
More:Biden’s student loan forgiveness will cost US about $400 billion, CBO estimates
From payment pause to student debt cancellation in under 3 years
In recent weeks, conversations around student debt forgiveness have been focused on how it would happen, and if one of the legal challenges would derail the president’s multibillion-dollar plan. That’s a sea change from conversations earlier this year in which borrowers wondered when the payment pause might end or if the average borrower would have any debt canceled.
There was reason to believe they would. Biden had campaigned on forgiving up to $10,000 in student debt per borrower, but some advocates had started to question if he would deliver on that promise.
The federal government froze student loan payments in March 2020 under President Donald Trump, and extensions of the moratorium often came just weeks or days ahead of when a given freeze was scheduled to end. In addition to the pause on payments, the federal government set interest rates at zero percent, and collections agencies stopped attempting collect on overdue bills.
More:How the student loan payment pause changed people’s lives
Though the uncertainty wore on loan holders’ nerves, it allowed millions of borrowers to pay down their debts, save for a home, or keep food on the table. The pandemic and the sluggish economy that came with it initially drove the pause, but rising gas prices and inflation prompted the Biden administration to renew it time and again.
In August, the federal government announced the one-time debt cancellation and what it called a “final extension” of the payment pause. A year earlier, the government said an extension of the payment pause through January 2022 would be the “final” one. But then last December, the administration extended the moratorium yet again.
Now, borrowers who fill out the form may see some of their debt erased in a matter of weeks.
More:Debt relief will change the lives of some with student loans, but fall short for others.
Contact Chris Quintana at (202) 308-9021 or cquintana@usatoday.com. Follow him on Twitter at @CQuintanadc.