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How Figure Out Your Post-Forgiveness Student Loan Payment

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Photo: fizkes (Shutterstock)

If you’re eligible for Biden’s sweeping student loan forgiveness plan, then you can—and should—apply right now. Earlier this week the U.S. Department of Education launched a beta version of the form for federal student loan debt relief. But what happens after you send in your application? Here’s how to find out what your new balance and monthly payments will look like after applying for student loan relief.

How debt relief will be applied to your loans

After you send in your application, Federal Student Aid (FSA) will notify you once they’ve confirmed your eligibility for forgiveness. They’ll then determine how debt relief will be applied to your loans, and from there, they are the ones who provide that information to your loan servicer(s).

If you still have a loan balance after the maximum amount of debt relief is applied, your monthly payment will be recalculated based on your new balance. Your loan servicer will be the one to notify you with your remaining balance and the new monthly payment amount.

Keep in mind that no student loan payments are required until after the ongoing payment pause ends on Dec. 31, 2022.

What if you made payments during the pandemic pause?

If you made payments during the pandemic pause that brought your balance below the amount of relief you’re eligible for (either $10,000 or $20,000) but you didn’t pay off your loan in full, those payments will be refunded automatically. Your monthly payments will be recalculated from there.

Here’s an example provided by FSA: Let’s say you’re eligible for $10,000 in debt relief. If you currently owe $9,500, that amount of relief will be applied to your loan(s). If you paid $1,000 during the payment pause, you’ll be automatically refunded $500—the remaining amount of your $10,000 of debt relief.

How to find your loans (and loan providers)

Head to studentaid.gov. Note: This is not the same portal you may typically use to make student loan payments (e.g., through a servicer like Sallie Mae). After logging in, select “My Aid” in the dropdown menu under your name. Your loan servicer(s) should appear in that section. Clicking on “Loan Breakdown” will show you a list of the loans you received, including loans you have paid off or consolidated into a new loan.

Once you confirm your loan company, visit that servicer’s website and log in to your account to ensure all your contact information is up to date so you do not miss any notifications from them during this process.

To recap: it’s your existing loan provider, not the government, that will inform you about any outstanding balance and revised monthly payment amounts (and those payments won’t resume until January).

What else to know about the student loan forgiveness application

The short and simple application should only take two minutes to complete: just fill in your name, birth date, Social Security number, phone number, and an e-mail address. You don’t need supporting documents (like tax records) or a Financial Student Aid ID.

If you submit via the current beta launch, it will be processed officially and you won’t need to resubmit when the application officially opens later this month. The application will remain open until Dec.31, 2023, so while there’s no rush to apply, it doesn’t hurt to send in your application as soon as you can—the faster you do, the faster you’ll see forgiveness applied to your outstanding balances. The department suggests that borrowers apply for relief by mid-November.

No student loan debt will be canceled before Oct. 23, 2022, but NPR reports that borrowers who fill out the application should see their debts canceled within a matter of weeks. One more time: Here is the application page for the beta version, which is out now.