Savannah Hulsey Pointer, FISM News
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The federal government has initiated the beta launch for the Federal Student Loan Debt Relief program allowing borrowers to have a full or partial discharge of student loans up to $20,000 for individuals who made less than $125,000 in 2021 or 2020 and families who made less than $250,000 in the same period.
According to the federal student aid website applications can be put in between now and Dec. 31, 2023, and the borrower will be contacted if further documents are needed. After eligibility is assessed and if the debt is discharged, the loan service provider will notify the borrower once the relief is processed.
According to a report by Business Insider, applications won’t be processed until the site is officially live later in the month, but those who apply during the beta period will not need to re-apply. The website asks users to complete a short form with simply their names, contact details, and Social Security numbers.
The test version of the site is reportedly being used to allow the Department of Education to identify potential problems and fix any bugs in the system before it formally goes live in the next few weeks.
A recent report by CBS News indicated that The Biden administration stated that it wanted to make an application that was “short and straightforward” before launching the beta site. The test application is quick to complete, but some borrowers could have concerns about the timeliness of debt forgiveness, among other things.
The majority of Americans with student loan debt — roughly 95% — should be eligible for relief, while those who earn too much money are not. Even though the program may be able to assist the 40 million Americans who are struggling with student loan debt, conservative lawmakers and advocacy groups have filed lawsuits to try and thwart the initiative. They say it will worsen inflation, and ultimately put the burden of the debt on the shoulders of millions of Americans who never attended college, paid for their college, or have already paid off their student loans.
The beta application went live the same day that Phillip Swagel, the director of the Congressional Budget Office (CBO) appeared on CNBC’s “Squawk Box,” and said that “the fiscal trajectory in the U.S. is not sustainable right now.”
“Phil, economists use this sort of — I don’t know if it’s a euphemism or what, but putting the fiscal position on a sustainable path. When we put up that chart of the trajectory of deficits as a percentage of GDP and we look at what’s happening in the UK when the prime minister comes forward and says, we’re going to do additional deficit spending, even if it’s not that much, then the bond market freaks out. Can you say that U.S. finances are on a sustainable path?” CNBC Senior Economics Reporter Steve Liesman asked, according to Breitbart News’ report.
Swagel responded,
So, we know the fiscal trajectory in the U.S. is not sustainable right now. Something has to be done. The good news is that we have time, right? So, in some sense, we look at the UK and — we’ll see what they announce later today — but we look at them and we see the effect of sentiment. Sentiment can change and that, as I said, feeds through to interest rates and can hit us pretty quickly. We seem to be in a good position now, in the sense that we have time to make adjustments. We have to make them. We don’t have to make them at this moment.”