A “beta test” of the request for student loan relief went live Friday night, kicking off the Biden administration’s sweeping agenda to write off student debt for tens of millions of Americans.
The Department of Education’s trial application is a long-awaited first step in policy announced in late August, allowing people with federal student loans to apply for up to $20,000 in debt relief, depending on the type. of financial aid they have received and how much money they are making.
During the beta testing period, according to a department spokesperson, borrowers will be able to submit applications for the student debt relief program and will not need to reapply if they submit their application during the beta test.
This period will help the department monitor the app site’s performance through “real-world usage” before the app’s official launch later this month, the department says it can fine-tune processes and discover any bugs.
The highest amount of debt relief — up to $20,000 — will go to people who received Pell Grants for College, a type of aid given to students from low-income families. All other borrowers with federal loans will be eligible for relief of up to $10,000.
The relief covers anyone who earned less than $125,000 in the 2020 or 2021 tax year, or less than $250,000 as a couple.
Borrowers must apply by mid-November in order to have their loans forgiven by the time the pause on student loan repayments is lifted on Jan. 1, 2023, the White House said. This pause has been in place since the start of the pandemic. The debt relief request will also be closed at the end of the year, ending on December 31, 2022.
A student works at the Rice University library in Houston on August 29, 2022.
Brandon Bell/Getty Images, FILE
But there is a subset of borrowers who were barred from the program following a late change in the Biden administration as it tried to dodge lawsuits. Anyone who has a Perkins loan or a federal home education loan — two loans backed by the federal government but run by private banks — can no longer get help.
The Biden administration estimated that the rule change, made in late September, disqualified about 700,000 people from politics.
The administration stressed that this is a small minority of people compared to the potential reach this policy could have. As proponents have pointed out, however, the success of the policy depends on how many people hear about it and how easy it is to apply.
The policy should apply to 43 million Americans, and 20 million could see their debt completely erased, estimates the White House. It’s expected to cost about $400 billion over 30 years, according to the Congressional Budget Office.
The rollout of the demand comes as the policy has been repeatedly challenged in court, largely by conservative organizations and states that argue the Biden administration lacks the authority to write off loan debt. student.
So far, none of the lawsuits have halted the program, which the Biden administration says has a solid legal footing under the HEROES Act — a law that grants broader-than-usual authority to the secretary. to education during times of emergency, such as COVID-19.
And President Joe Biden, while acknowledging the plan could be controversial, has also championed it as the right thing to do.
“Now I understand that not everything I announce today will make everyone happy,” Biden said in a speech at the White House when the policy was announced.
“I will never apologize for helping working and middle class Americans,” he said.