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The US Department of Education application for student loan forgivenesswhich officially went live earlier this week, is surprisingly easy to complete.
Borrowers simply need to provide some basic contact information and their social security number. That’s it.
Well, for some.
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Millions of people asking for relief could be asked to provide more information at a later date, the Biden administration said.
“There is no identity authentication process or income verification process, so the potential for fraud or benefit eligibility errors in this online form is huge,” said Scott Buchanan. , executive director of the Student Loan Servicing Alliance, a trade group for federal student loan officers.
As a result, Buchanan said, “I understand why the education department has to vet many applicants.”
Here’s what to know about the extra step some borrowers will have to take.
How many borrowers could this affect?
Who is likely to hear from the Department of Education?
If you are still a dependent student, you are prompted to claim a rebate using your own income information. But if the Department of Education identifies that you are in that status, it will send you an email with instructions for you and your parent, he said.
Since student dependent income eligibility is based on their parents’ income, your parents will likely need to certify or prove that they fall within the income limits of the relief: $125,000 for individuals and $250,000 $ for families.
Also, as a fraud prevention measure, “I would expect a random sample of applicants, both dependent and independent, to be selected for vetting,” said higher education expert Mark Kantrowitz.
What information might I need to have on hand?
If you are selected for verification, you will likely need to prove that you in fact fell below the income limits for the rebate.
It is important to note that the Department of Education will review your so-called adjusted gross incomewhich may be different from your gross salary.
You calculate the AGI by adding your income – including salary, interest and more – and subtracting the Part II items from Schedule 1 on your tax return. Some of these items may include deductible individual retirement account Where health savings account dues, educator expenses and more.
If your AGI was under the caps in 2020 or 2021, you’re in the clear.
To confirm your eligibility with the Department of Education, you will need to submit either a standard 1040 tax return or a tax return transcript. If you did not file a tax return in any of these years, you will need a verification letter from the IRS stating that you were a non-filer.
How to obtain these documents?
If you do not have your previous tax returns, you can obtain a Tax Return Transcript or Non-Reporting Verification Letter using the online website. IRS Transcript Tool or by depositing IRS Form 4506-TKantrowitz said.
The verification process should take approximately 30 minutessays the Ministry of Education.