Education Department Could Flag Up To 5 Million Student Loan Relief Applications For Review – What To Do If Yours Is Among Them – NBC 6 South Florida
- Between 1 million and 5 million student borrowers applying for forgiveness may be asked to provide additional information to verify their eligibility.
- Here’s what you need to know if this happens to you.
The US Department of Education’s student loan forgiveness application, which officially went live earlier this week, is surprisingly easy to complete.
Borrowers simply need to provide some basic contact information and their social security number. That’s it.
Well, for some.
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Millions of people asking for relief could be asked to provide more information at a later date, the Biden administration said.
“There is no identity authentication process or income verification process, so the potential for fraud or benefit eligibility errors in this online form is huge,” said Scott Buchanan. , executive director of the Student Loan Servicing Alliance, a trade group for federal student loan officers.
As a result, Buchanan said, “I understand why the education department has to vet many applicants.”
Here’s what to know about the extra step some borrowers will have to take.
How many borrowers could this affect?
Ministry of Education officials estimate between 1 million and 5 million student borrowers will be asked to provide additional documents after applying for the pardon.
Who is likely to hear from the Department of Education?
If you are still a dependent student, you are prompted to apply for a discount using your own income information. But if the Department of Education identifies that you are in that status, it will send you an email with instructions for you and your parent, he said.
Since student dependent income eligibility is based on their parents’ income, your parents will likely need to certify or prove that they fall within the income limits of the relief: $125,000 for individuals and $250,000 $ for families.
Also, as a fraud prevention measure, “I would expect a random sample of applicants, both dependent and independent, to be selected for vetting,” said higher education expert Mark Kantrowitz.
What information might I need to have on hand?
If you are selected for verification, you will likely need to prove that you in fact fell below the income limits for the rebate.
It is important to note that the Department of Education will look at your so-called Adjusted Gross Income, or AGI, which may be different from your gross salary.
You calculate the AGI by adding up your income — including salary, interest, and more — and subtracting items from Part II of Schedule 1 of your tax return. Some of these items may include deductible contributions to an Individual Retirement Account or Health Savings Account, educator expenses and more.
If your AGI fell below the caps in 2020 or 2021, you’re in the clear.
To confirm your eligibility with the Department of Education, you will need to submit either a standard 1040 tax return or a tax return transcript. If you did not file any tax returns in any of these years, you will need a verification letter from the IRS stating that you were a non-filer.
How to obtain these documents?
If you don’t have your past tax returns, you can get a tax return transcript or non-filing verification letter using the IRS Get Transcript online tool or by completing IRS Form 4506. -T, Kantrowitz said.
The verification process should take approximately 30 minutessays the Ministry of Education.