The U.S. Department of Education on Monday released the student debt relief application that could eliminate tens of thousands of dollars in debt for more than half a million Kentuckians.
The online application is available at this link.
“This is a big day for hundreds of thousands of Kentuckians, who can now apply for life-changing debt cancellation,” said Ashley Spalding, Research Director at the Kentucky Center for Economic Policy (KyPolicy). “Student debt cancellation will relieve enormous financial stress facing families in Kentucky, where Black students are more likely to have debt than white students and many with student loan debt have few economic resources with which to pay them back. While this policy doesn’t solve the problem, it’s a good first step that will help many whose lives and economic choices suffer under the weight of student debt.”
Under the Biden administration’s debt relief plan, borrowers with federal loans are eligible for up to $10,000 in student debt cancellation, or $20,000 if they received a need-based federal Pell Grant while attending college. To qualify, borrowers must have an income less than $125,000/year.
According to the White House, an estimated 563,300 Kentuckians are eligible for debt relief. Of those, an estimated 394,000 received Pell Grants and are eligible for the full $20,000 in cancellation.
While a small number of borrowers will automatically see their debt canceled, most will have to apply by Dec. 31, 2023 in order to receive the relief. Unlike in some other states, Kentuckians will not have to pay income tax on debt that is forgiven.
The application, which is available in both English and Spanish, requires no supporting documents or FSA IDs. Borrowers are required only to submit their name, social security number, birth date and contact information.