Education Department Suspends New Requests for Student Loan Debt Relief

The Ministry of Education has closed new applications for student debt relief. His plan to cancel up to $20,000 in student debt for federal borrowers has hit the legal grunts.

Visitors to the site today find this message from the Ministry of Education:

“The courts have issued orders blocking our student debt relief program. Therefore, at this time, we are not accepting applications. We are seeking to overturn these orders. If you have already applied, we will retain your request.”

In addition to the two legal constraints that debt cancellation now faces, a number of other lawsuits remain on the court calendar. Any of them could further delay the reopening of the application or the delivery of debt relief.

Should I make my payments in January or not?

There is no certainty about a previously scheduled date for debt relief – except for one that resumes federal student loan payments in January 2023. There is speculation that the Biden administration could extend forbearance on federal student loan payments even further.

In the meantime, you should plan to make payments in January, even if your balance would have been wiped out by debt forgiveness.

If you requested reimbursement of payments made during the pandemic – when you were not required to make payments – this amount will be added to your current loan balance, and you will make payments against this total.

The timeline below was provided before the Department of Education halted new applications.

  • Mid-November: When you must submit a request if you want to ensure you receive relief before payments restart in January.

  • January 1, 2023: Federal student loan payments resume.

  • December 31, 2023: Deadline to apply for student debt relief.

  • March 31, 2024: Deadline for submitting proof of income.

What do I need to apply for student loan forgiveness?

Not everyone needs to apply for a student loan forgiveness. Nearly 8 million federal borrowers will automatically receive relief because they are enrolled in an income-tested repayment plan; their income information is on file with the Ministry of Education. All other eligible borrowers will need to submit a request to have their balance reduced to $20,000.

The application requires:

• Social Security number.

You must also verify that you will provide proof of income to the Department of Education by March 31, 2024. And you must agree to certify that all information you submit is true under penalty of perjury.

When submitting proof of income, you must include one of the following:

• IRS Form 1040 (tax return) from 2020 or 2021.

• If you have not filed a tax return: 2020 or 2021 IRS non-filing verification letter.

Here’s what else we know about the application process:

Who is eligible for student loan forgiveness?

There has been confusion over who is and is not eligible for the relief. Here is a reminder:

Those eligible for relief of up to $10,000:

  • For 2020 or 2021, your income must be less than $125,000 if filing individually or $250,000 if filing jointly.

  • Did not receive a Pell Fellowship while in college.

  • Have direct undergraduate loans; direct loans to graduates; PLUS parent loans; PLUS graduate loans; government-owned Perkins loans or government-owned loans under the Federal Family Education Loan Program, or FFELP.

  • Your loans must have been disbursed before June 30, 2022.

Those who qualify for relief of up to $20,000:

  • The above requirements except for not receiving a Pell Grant.

  • Only undergraduate debt is eligible for the additional $10,000 forgiveness.

Those ineligible for relief:

  • Have private student loans.

  • Have commercially held FFELP loans. However, those who applied to consolidate their debt before September 29, 2022 would qualify.

Who benefits from automatic student debt relief?

Only borrowers already enrolled in income-tested repayment plans are eligible for automatic relief. These borrowers will be notified of their eligibility by the Department of Education. Those who want their aid processed sooner can apply now.

How to Opt Out of Student Debt Relief

Those who are eligible to automatically receive relief can choose to opt out. If you wish to opt out, you must contact your service agent directly to let them know that you do not wish to receive assistance, according to the Department of Education. According to the Washington Post, borrowers eligible for relief must automatically opt out by November 14, 2022. If you choose to opt out now, you can still request relief later as long as you do so before December 31, 2023.

Why would anyone withdraw from aid? Well, some borrowers object to the decision to cancel the debt. Others may be concerned about their personal tax implications. Although there is no federal tax on the relief, the reversed amount may be taxed as income by certain states, including Arkansas, California, Indiana, Minnesota, Mississippi, North Carolina and Wisconsin.

How will I know when the cancellation has taken place?

Expect to receive relief within six weeks, according to the Department of Education. You will be notified through your repairer. Monitor your loan account through your service agent or on

Why can’t I contact my repairer?

The Education Department handles and processes cancellation requests, not the company that services your loans.

You may have questions about the status of your canceled debt. If you call your repairer, you’ll be in a long line: millions of borrowers have changed repairers, expect upcoming refund, or adjust eligible payments for civil service loan forgiveness. Your only option? Wait on hold or wait for them to let you know.

What if I get a call about student debt relief?

Any unsolicited call you receive regarding the cancellation is likely a scam. Scams are rampant since President Joe Biden announced the loan cancellation, according to the Federal Trade Commission. The Department of Education or your service agent will not call you to apply for debt relief. If you have any doubts about a call you receive, hang up and contact your repairer. If you have concerns about an unsolicited text message about canceling a student loan, do not respond. And never give your student financial aid ID, account number, or password to anyone.

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