Do you need tax or loan documents for student loan forgiveness?
Nearly two months after President Joe Biden announced his plan to cancel debt for millions of borrowers, the online application for federal student loan forgiveness is now open.
Federal Pell Grants recipients are eligible for up to $20,000 in debt relief, and those who did not receive grants can get up to $10,000 in relief if they meet additional criteria, according to StudentAid.gov.
Borrowers who earned less than $125,000, or couples who earned less than $250,000 in 2020 or 2021 are eligible for relief. The deadline to apply is Dec. 23, 2023.
Here’s what documents you’ll need to complete the application.
What documents are needed for the application?
Initially, borrowers will not have to upload any documents, including tax records, to complete the application, NPR reported.
The Department of Education will match the information applicants provide with loan and income information it has on file, a senior Biden administration official told NPR.
Applicants will be contacted by the Department of Education if additional documentation is needed to verify their income, according to StudentAid.gov.
To verify their income, applicants may be asked to submit their tax returns, tax return transcripts, or a letter verifying that they did not file taxes from 2020 or 2021, Business Insider reported. It is estimated that up to 5 million borrowers will be required to submit the verification form and provide supporting documentation.
Tax return transcripts and Verification of Non-filing Letters can be accessed on the IRS website.
What about dependent students?
Applicants who were considered dependent students between July 1, 2021 and June 30, 2022, will be contacted for information about their parents’ income.
According to StudentAid.gov, applicants may be considered dependent students if they:
Were enrolled as an undergraduate student between July 1, 2021 and June 30, 2022
Were born after Jan. 1, 1998
Aren’t married
Dependent students are eligible for the same amount of debt relief as other applicants, but their eligibility is based on one or both of their parents’ income.
What happens when applications are approved?
Applicants will be notified when their applications are approved, according to StudentAid.gov.
Loan servicers will apply relief directly to loans and let applicants who have outstanding loan balances know what their new monthly payments will be. No payments are required until after the payment pause ends on Dec. 31.
