Student loan forgiveness application officially launches, putting relief in sight for 40 million Americans
The U.S. Department of Education has launched its official application for student loan forgiveness, meaning tens of millions of Americans can now request the financial relief.
The launch follows a beta test, during which time the Department of Education offered on and off access to the form while it tested the site. Borrowers could apply for forgiveness in those windows when the portal was open.
More than 8 million people applied for relief over the weekend, said President Joe Biden on Monday during a speech at the White House.
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“Today I’m announcing how millions of people, working class folks, can apply to get this relief,” Biden said.
The president announced in August that most federal student loan borrowers will be eligible for some forgiveness: up to $10,000 if they didn’t receive a Pell Grant, which is a type of aid available to low-income undergraduate students, and up to $20,000 if they did.
More than 40 million Americans are in debt for their education, owing a cumulative $1.7 trillion, a balance that far exceeds outstanding credit card or auto debt. Skyrocketing higher education costs coupled with stagnant wages have caused the amount of student debt people graduate with to soar. Today the average balance is more than $30,000, up from $12,000 in 1980.
Before the pandemic, when the U.S. economy was enjoying one of its healthiest periods in history, problems plagued the federal student loan system. Only about half of borrowers were in repayment in 2019, according to an estimate by higher education expert Kantrowitz.
A quarter — or more than 10 million people — were in delinquency or default, and the rest had applied for temporary relief for struggling borrowers, including deferments or forbearances. These grim figures led to comparisons to the 2008 mortgage crisis.
In the background of the White House’s official application launch is a growing number of legal challenges brought by Republicans against the president’s plan.
This is a developing story. Check back for updates.
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