How to prepare to apply for student loan forgiveness

HOUSTON, TEXAS – AUGUST 29: Students study in the Rice University Library on August 29, 2022 in Houston, Texas.

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The US Department of Education could have its student loan forgiveness application up and running as soon as the next few weeks.

Borrowers may begin to see their balances reduced or eliminated by the end of the year, according to a department spokesperson.

This is how you can prepare for the jubilee.

1. Make sure you qualify based on income

President Joe Biden announced last week that most federal student loan borrowers will be eligible for forgiveness: up to $10,000 if they didn’t receive a Pell Grant, which is a type of aid available to low-income college students, and up to $20,000 Yes, you did it.

The relief will be limited to borrowers making less than $125,000 per year, or married couples or heads of households making less than $250,000.

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How to find out if you qualify for student loan forgiveness

Check your recent tax returns to confirm that your income fell below those thresholds. The Department of Education will consider people’s so-called adjusted gross income or AGI, which may be different from their gross salary.

To confirm your AGI for 2020 and 2021, look for line 11 on the first page of your tax return, known as Form 1040.

2. Make sure your loans qualify

The vast majority, roughly 37 million borrowers, will be eligible for forgiveness based on their loan type because their debt is under what is called the William D. Ford Federal Direct Loan Program. That includes Direct Stafford Loans and all Direct subsidized and unsubsidized federal student loans. Under the Direct program, Parent Plus and Grad Loans are also eligible for relief.

If you are one of the 5 million borrowers with a Federal Family Education Loan (FFEL), your debt is actually held by a private company and not by the government. To make sure you’re included in forgiveness as soon as possible, you can consolidate your loan in the Direct Loan Program.

However, if you don’t want to consolidate your loans, the Department of Education says it will work with private lenders in the coming months to make sure FFEL borrowers benefit from forgiveness regardless.

You can check your loan type at and sign in with your FSA ID. Then go to the “My help” tab.

3. Gather records

It’s not entirely clear yet what the student loan forgiveness application will look like, but it’s a good idea to have all the relevant records ready to show you qualify, experts say.

About 8 million borrowers who have signed up for income-based repayment plans may not have to certify their income because the government already has their data.

For everyone else, it may help to keep the tax returns you dug up for step one and print out your loan records from step two.

When you log in to, the grants tab allows you to find out if you received a Pell Grant in your undergraduate years and are eligible for $20,000 relief. If you received a Pell Grant, take a screenshot or print the document that proves it.

Also print a screenshot of your current student loan balance, so you can later verify that your debt was reduced by the correct amount.

4. Keep up with the process

Borrowers can now register on the Department of Education’s website to receive updates on the student loan forgiveness process, including when the application will be ready.

A spokesperson for the US Department of Education says it could take about 8 weeks after you have all the necessary information on a borrower until your debt is cleared.

The deadline to submit an application for forgiveness will be December 31, 2023.

– CNBC’s Kate Dore contributed reporting.

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