Applying for student debt forgiveness in Kentucky? Answers to 5 questions about the process
Update: As of Nov. 11, the student loan debt relief application has been blocked by a court order, according to the Department of Education. Applications that have already been submitted will be saved, but no additional applications can be submitted and loan forgiveness cannot be distributed at this time. The original story can be found below.
The White House estimates that 563,300 student loan borrowers in Kentucky are eligible for student debt relief.
If you’re one of those borrowers, you may have questions about the application process or what happens after you’ve applied.
While a federal appeals court has temporarily blocked the forgiveness plan, people are still being encouraged to fill out the application on the Department of Education website. The court decision does not prevent people from filling out the application, and it does not prevent the Department of Education from reviewing submitted applications, White House press secretary Karine Jean-Pierre said in a statement last week. It does, however, mean that distribution of loan relief is paused at this time.
The Herald-Leader asked readers for questions related to the student loan forgiveness process. Here’s what they wanted to know.
How do I apply for forgiveness?
The loan forgiveness application is located on the Department of Education website. It’s a fairly simple form, and requires the borrower’s name, social security number, birthday and contact information. Loan forgiveness only applies to federal student loans, not private loans, so make sure you know what type of loan you have before starting the process.
After you complete that form, the Department of Education will determine if you are eligible for forgiveness and contact you if they need more information. If approved for forgiveness, your loan servicer will contact you to let you know that it has been approved.
The deadline to apply for forgiveness is Dec. 31, 2023, but it is recommended that you apply by the middle of November 2022 to be eligible for forgiveness before the loan repayment pause ends at the end of this year.
Which company do I apply for forgiveness from?
The Department of Education is the official place to apply for loan forgiveness. You may also hear from your loan servicer about applying for forgiveness, but they should link you to the Department of Education form.
Kentucky officials have warned those applying for forgiveness to be aware of potential scams.
For example, scammers may contact borrowers claiming to be affiliated with the U.S. Department of Education or a loan servicing provider and offer specialized repayment plans, access to quicker loan forgiveness or assistance with filling out the application, the Kentucky Attorney General’s Office said.
Scammers may ask for direct deposit information or power of attorney forms, which give them direct access to your bank account. The official application does not include any of that information and you should not give it out if asked. You should also not have to pay to apply for forgiveness.
Are students who are still in college and dependents on their parents’ taxes eligible for loan forgiveness?
Some students who are considered dependents will be eligible for forgiveness. According to the Department of Education, you are considered a dependent for student aid purposes if:
You were enrolled as an undergraduate student between July 1, 2021 and June 30, 2022;
You were born after Jan. 1, 1998;
You are not married.
Dependent students are eligible for relief, but it is based on both of your parents’ income, not your own. Dependents should apply for debt relief using their own income information, and then if you are identified by the federal government as a dependent, you will be contacted with further instructions for you and your parents.
Debt forgiveness applies only to loan balances from before June 30, 2022. Loans disbursed after that date are not eligible for forgiveness.
Will I be reimbursed for loan payments I made throughout the COVID repayment pause?
According to the Department of Education website, if you made loan payments during the pause from March 13, 2020 to Dec. 31, 2022, and your current loan balance is below the amount of relief you’ll receive, you should still apply for relief.
After you’ve been approved, you will automatically be refunded the amount you paid during the pause, up to the remaining amount of your eligible relief.
For example, if you are eligible for $10,000 of debt relief, and currently owe $9,500, that amount will be forgiven. If you paid $1,000 during the payment pause, you will be refunded $500.
What happens after I apply?
After filling out the application, you will get an email confirmation from the Department of Education and your application will be reviewed.
You may be contacted for more information by the Department of Education, including information about your income, your parents’ income if you are a dependent student, or if you do not qualify for loan forgiveness.
If your application has been approved, you will be contacted by the Department of Education. The department will then contact your loan servicer with information about your loan forgiveness. Your loan servicer will apply the forgiveness, and then notify you once it has been applied.
This story was originally published October 26, 2022 at 11:18 AM.