Federal Student Loan Forgiveness

In recent weeks, the Biden Administration passed a Federal Student Loan Forgiveness program geared toward helping lift a weight on millions of students nationwide. This program is geared towards offering up to $20,000 in student loan forgiveness. Our goal is to provide you with all the facts related to this program and get you the answers that you need to apply for Federal Student Loan Forgiveness. Continue reading below to see who qualifies and how much you may qualify for in student loan forgiveness.

Federal Student Loan Forgiveness

What We Know About Federal Student Loan Forgiveness

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    Here’s What We Know

    The Biden administration has put in place federal student loan forgiveness programs. If you don’t qualify for full loan forgiveness, there may be other options to lower your monthly payment and make your loans more manageable. You can get debt relief with the right help.

    Millions of Americans will see their student debt canceled or reduced following President Joe Biden’s long-awaited announcement on student loan forgiveness.

    The Biden administration is forgiving up to $10,000 in federal student loans for those making less than $125,000 a year for individuals or $250,000 for married couples or heads of households and up to $20,000 for Pell Grant recipients who meet the income threshold. Private loan holders are not included in the plan.

    Most borrowers would need to apply for the program online, according to StudentAid.gov, which noted that an application will become available “in the coming weeks.” Nearly 8 million borrowers for whom the Department of Education has income information available, however, should be eligible to receive debt relief automatically.

    Federal Student Loan Forgiveness
    Federal Student Loan Forgiveness

    How To Apply

    An online form will be available by early October. Here are some steps you can take now and in the future.

    Step 1: Check if you’re eligible

    You’re eligible for student loan debt relief if your annual federal income was below $125,000 (individual or married, filing separately) or $250,000 (married, filing jointly or head of household) in 2021 or 2020.

    • $20,000 in debt relief: If you received a Pell Grant in college and meet the income threshold, you’ll be eligible for up to $20,000 in debt relief.
    • $10,000 in debt relief: If you did not receive a Pell Grant in college and meet the income threshold, you’ll be eligible for up to $10,000 in debt relief.

    Step 2: Prepare

    Here’s what you can do to get ready and to make sure you get our updates:

    • Log in to your account on StudentAid.gov and make sure your contact info is up to date. We’ll send you updates by both email and text message, so make sure to sign up to receive text alerts. If it’s been a while since you’ve logged in, or you can’t remember if you have an account username and password (FSA ID), we offer tips to help you access your account.
    • If you don’t have a StudentAid.gov account (FSA ID), you should create an account to help you manage your loans.
    • Make sure your loan servicer has your most current contact information so they can reach you. If you don’t know who your servicer is, you can log in and see your servicer(s) in your account dashboard.

    Step 3: Submit your application (when available)

    The application will be available online by early October 2022.

    We’ll share updates on this page and send you an email when the application is available. You’ll have until Dec. 31, 2023, to submit your application.

    For the official announcement of this program, please head over to the student aid website.

    Frequently Asked Questions

    • How do I know if I am eligible for debt cancellation?
    • What does the “up to” in “up to $20,000” or “up to $10,000” mean?
    • What do I need to do in order to receive loan forgiveness?
    • What is the Public Service Loan Forgiveness Program?
    How do I know if I am eligible for debt cancellation?
    • To be eligible, your annual income must have fallen below $125,000 (for individuals) or $250,000 (for married couples or heads of households)
    • If you received a Pell Grant in college and meet the income threshold, you will be eligible for up to $20,000 in debt cancellation.
    • If you did not receive a Pell Grant in college and meet the income threshold, you will be eligible for up to $10,000 in debt cancellation.
    What does the “up to” in “up to $20,000” or “up to $10,000” mean?
    • Your relief is capped at the amount of your outstanding debt.
    • For example: If you are eligible for $20,000 in debt relief, but have a balance of $15,000 remaining, you will only receive $15,000 in relief.
    What do I need to do in order to receive loan forgiveness?
    • Nearly 8 million borrowers may be eligible to receive relief automatically because relevant income data is already available to the U.S. Department of Education.
    • If the U.S. Department of Education doesn’t have your income data, the Administration will launch a simple application which will be available by early October.
    • If you would like to be notified when the application is open, please sign up at the Department of Education subscription page.
    • Once a borrower completes the application, they can expect relief within 4-6 weeks.
    • We encourage everyone who is eligible to file the application, but there are 8 million people for whom we have data and who will get the relief automatically.
    • Borrowers are advised to apply before November 15th in order to receive relief before the payment pause expires on December 31, 2022.
    • The Department of Education will continue to process applications as they are received, even after the pause expires on December 31, 2022.
    What is the Public Service Loan Forgiveness Program?
    • The Public Service Loan Forgiveness (PSLF) program forgives the remaining balance on your federal student loans after 120 payments working full-time for federal, state, Tribal, or local government; military; or a qualifying non-profit.
    • Temporary changes, ending on Oct. 31, 2022, provide flexibility that makes it easier than ever to receive forgiveness by allowing borrowers to receive credit for past periods of repayment that would otherwise not qualify for PSLF.
    • Enrollments on or after Nov. 1, 2022 will not be eligible for this treatment. We encourage borrowers to sign up today. Visit PSLF.gov to learn more and apply.

    Visit the one-time student loan debt relief page for more information.

    Federal Pell Grants

    Federal Pell Grants typically are awarded to undergraduate students with low or moderate income.

    Most borrowers can log in to StudentAid.gov to see if they received a Pell Grant. We display information about the aid you received, including Pell Grants, on your account dashboard and your “My Aid” pages.

    Log In to Your Account

    When you apply for debt relief, we’ll make sure all borrowers who received a Pell Grant receive the full benefit of up to $20,000 in relief if they meet the income requirements. ED has data on all borrowers who received a Pell Grant. If you received a Pell Grant prior to 1994, that information won’t display in StudentAid.gov, but you’ll still receive the full benefit.

    Federal Student Loan Forgiveness

    • If I have a Pell Grant, do I need to do anything to get the full $20,000 in debt relief?
    • Do I still qualify for the full $20,000 in debt relief if I received only one Pell Grant?
    • If I have parent PLUS loans and my child received a Pell Grant, can the full $20,000 in debt relief be applied to my parent PLUS loans?
    If I have a Pell Grant, do I need to do anything to get the full $20,000 in debt relief?

    Yes. You just need to submit your application for debt relief. We have a record of every student who has ever received a Federal Pell Grant. When you submit your application, we’ll check our records to determine if you have a Pell Grant, which would qualify you for up to $20,000 in debt relief. You don’t need to take any additional action to show us that you received a Pell Grant.

    Do I still qualify for the full $20,000 in debt relief if I received only one Pell Grant?

    Yes. As long as you received at least one Pell Grant of any amount, you qualify for the additional $10,000 in debt relief. This additional $10,000 will be applied to eligible loans, such as undergraduate, graduate, or parent loans. It doesn’t matter if the Pell Grant was used for the same program of study or at the same school as your federal student loan(s).

    If I have parent PLUS loans and my child received a Pell Grant, can the full $20,000 in debt relief be applied to my parent PLUS loans?

    No. Eligibility for debt relief is based on each borrower’s situation.

    If a dependent student received a Pell Grant, up to $20,000 in debt relief will be applied to the student’s loans—not to any loans their parent may have taken out.

    A parent who has taken out loans—including loans for their own studies or parent PLUS loans for their child—may qualify for debt relief if they meet the income eligibility criteria. If a parent also received a Pell Grant for their own studies, then the parent borrower may be eligible for up to $20,000 in relief on their loans. Otherwise, the parent borrower may be eligible for up to $10,000 in debt relief.

    Which Loans Are Eligible?

    The following types of federal student loans with an outstanding balance as of June 30, 2022, are eligible for relief:

    • William D. Ford Federal Direct Loan (Direct Loan) Program loans
      • Subsidized loans
      • Unsubsidized loans
      • Parent PLUS loans
      • Graduate PLUS loans
    • Federal Family Education Loan (FFEL) Program loans held by ED or in default at a guaranty agency
    • Federal Perkins Loan Program loans held by ED
    • Defaulted loans (includes ED-held or commercially serviced Subsidized Stafford, Unsubsidized Stafford, parent PLUS, and graduate PLUS; and Perkins loans held by ED)

    Consolidation loans are eligible for relief, as long as all of the underlying loans that were consolidated were first disbursed on or before June 30, 2022.

    Federal Student Loan Forgiveness

    • How do I know what kinds of loans I have?
    • Are defaulted loans eligible for debt relief?
    • Are private loans (i.e., non-federal loans) eligible for debt relief?
    • Are parent PLUS loans and graduate PLUS loans eligible for debt relief?
    • Are Federal Family Education Loans (FFEL) or Perkins Loans eligible for debt relief?
    How do I know what kinds of loans I have?

    You can identify your loan types by logging on to StudentAid.gov and selecting “My Aid” in the dropdown menu under your name. In the “Loan Breakdown” section, you’ll see a list of each loan you received. You’ll also see loans you paid off or consolidated into a new loan. If you expand “View Loans” and select the “View Loan Details” arrow next to a loan, you’ll see the more detailed name for that loan.

    Direct Loans begin with the word “Direct.” Federal Family Education Loan Program loans begin with “FFEL.” Perkins Loans include the word “Perkins” in the name. If the name of your servicer starts with “Dept. of Ed” or “Default Management Collection System,” your FFEL or Perkins loan is federally managed (i.e., held by ED).

    The “My Aid” section will also show you the servicer(s) for your loans.

    Are defaulted loans eligible for debt relief?

    Yes, defaulted loans are eligible for debt relief. If you have a remaining balance on your defaulted loan(s) after relief is applied, consider getting or staying out of default through the Fresh Start initiative.

    Are private loans (i.e., non-federal loans) eligible for debt relief?

    No. Private (non-federal) loans are not eligible for debt relief. If you consolidated federal loans into a private (non-federal) loan, the consolidated private loan is not eligible for debt relief.

    Are parent PLUS loans and graduate PLUS loans eligible for debt relief?

    Yes. All ED-held loans, including PLUS loans for parents and graduate students, are eligible for relief.

    Are Federal Family Education Loans (FFEL) or Perkins Loans eligible for debt relief?

    All loans eligible for the student loan pause are also eligible for relief, including loans held by ED and guaranty agencies.

    ED is assessing whether to provide relief to borrowers with privately owned federal student loans, including FFEL and Perkins Loans, and is discussing this with private lenders. In the meantime, borrowers with privately held federal student loans can receive this relief by consolidating these loans into the Direct Loan program. All eligible borrowers will have until Dec. 31, 2023 to submit an application for debt relief.

    FFEL Joint Consolidation Loans, often referred to as spousal consolidation loans, are not eligible for consolidation into the Direct Loan program under current law.

    General Info About Debt Relief

    • How can I find out how much debt relief I’ll get?
    • How will I know when debt relief has been applied to my account?
    • What happens if I still have a loan balance after debt relief is applied?
    • Am I eligible for a refund if I made voluntary payments during the pandemic?
    • Do I have to be repaying my loans to be eligible for debt relief?
    • If I have multiple loans, can I pick which loans get the relief?
    • How will debt relief be applied to my loans?
    • Will my debt relief be taxed?
    • How do I get help if I have questions or need assistance?
    How can I find out how much debt relief I’ll get?

    If you meet the income requirements and have eligible loans, the amount of your debt relief will depend on your outstanding balance and whether you received a Federal Pell Grant.

    • If you received a Pell Grant, you can receive up to $20,000 in debt relief.
    • If you didn’t receive a Pell Grant, you can receive up to $10,000 in debt relief.

    If your outstanding loan balance is less than the maximum amount of debt relief you’re eligible for, you’ll receive only relief of your full loan balance.

    Once you submit your application for debt relief, we’ll determine your relief amount.

    How will I know when debt relief has been applied to my account?

    Your loan servicer will notify you when the relief has been applied to your account, with details on how the relief was applied.

    What happens if I still have a loan balance after debt relief is applied?

    Loan balances remaining after relief will be re-amortized, meaning we will recalculate your monthly payment based on your new balance, potentially reducing your monthly payment. Your loan servicer will communicate your new payment amount to you.

    Am I eligible for a refund if I made voluntary payments during the pandemic?

    Yes. You will automatically receive a refund of your payments during the payment pause if:

      • you successfully apply for and receive debt relief under the Administration’s debt relief plan, AND
      • your voluntary payments during the payment pause brought your balance below the maximum debt relief amount you’re eligible to receive but did not pay off your loan in full.

    For example, if you’re a borrower eligible for $10,000 in relief; had a balance of $10,500 prior to March 13, 2020; and made $1,000 in payments since then—bringing your balance to $9,500 at the time of discharge—we’ll discharge your $9,500 balance, and you’ll receive a $500 refund.

    Other borrowers can still receive refunds on voluntary payments made after March 13, 2020 by contacting their servicer. It’s important to note that these refunded payments will increase your loan balance and your monthly payments. If you expect to have a balance after discharge is applied and wish to request a refund, you can do so by contacting your servicer until Dec. 31, 2023.

    If you consolidated your loan after March 13, 2020, refunds aren’t available for any voluntary payments made prior to the consolidation.

    Refund requests can only be made by you and refunded to you, even if someone else made a payment on your loan.

    Do I have to be repaying my loans to be eligible for debt relief?

    No. Borrowers are eligible for debt relief regardless of whether they’re in repayment, in school, or in grace, as long as they meet the income requirements and have eligible loans.

    If I have multiple loans, can I pick which loans get the relief?

    We’ll determine how relief gets applied to your loans. See the next FAQ for additional details. Federal Student Aid will make this determination and provide the guidance to loan servicers, who will then process the relief.

    How will debt relief be applied to my loans?

    For borrowers with multiple loans, we’ll apply the relief in the following order:

    • Defaulted ED-held loans
    • Defaulted commercial FFEL Program loans
    • Non-defaulted Direct Loan Program loans and FFEL Program loans held by ED
    • Perkins Loans held by ED

    If you have multiple loans in a program type (e.g., multiple Direct Loan Program loans), we’ll apply the relief in the following order:

    • Apply relief to loans with highest statutory interest rate.
    • If interest rates are the same, apply to unsubsidized loans prior to subsidized loans.
    • If interest rate and subsidy status are the same, apply to the most recent loan.
    • If interest rate, subsidy status, and disbursement date are the same, apply to the loan with the lowest combined principal and interest balance.
    Will my debt relief be taxed?

    One-time student loan debt relief will not be subject to federal income taxes. State and local tax implications will vary.

    As of now, the following states will tax your student loan forgiveness:

    • North Carolina
    • Mississippi
    • Indiana
    How do I get help if I have questions or need assistance?

    We’ll continue to update this page as we have more details. The program information you can read here is the same information our contact center agents have at this time. After the online application is live, support for the form will be available at 1-833-932-3439.

    Applying for Debt Relief

    • Will any borrowers receive automatic debt relief?
    • How will I know if I automatically qualify for debt relief?
    • When will the online application be available?
    • How do I know if you received my application?
    • What happens if I applied for Public Service Loan Forgiveness (PSLF)?
    • How long do I have to apply for debt relief?
    • Is there a paper version of the debt relief application?
    Will any borrowers receive automatic debt relief?

    Although most borrowers will have to apply for debt relief, we have income data on hand for around 8 million borrowers. These borrowers will get the relief automatically.

    How will I know if I automatically qualify for debt relief?

    If we determine that you automatically qualify for debt relief, we’ll send you an email and text message (if you’re signed up for text alerts). You don’t have to take any action. We’ll provide your information to your loan servicer to process your relief.

    We’ll use Free Application for Federal Student Aid (FAFSA®) and income-driven repayment application information to identify borrowers—or, as appropriate, parents—who have submitted income data for tax years 2021 or 2020. We’ll use this data to determine which borrowers meet the income requirements. If we have borrower data for both years, we’ll use the year with the lower income.

    When will the online application be available?

    The online application will be available by early October 2022.

    How do I know if you received my application?

    When you submit your application for debt relief, you’ll see a page online confirming your form was submitted. You’ll also get a confirmation email from us, so make sure we have your most current email address. You can log in to StudentAid.gov and review your contact information.

    What happens if I applied for Public Service Loan Forgiveness (PSLF)?

    We’ll identify any borrower who submitted both an application for one-time student loan debt relief and a PSLF form. If you receive one-time student loan debt relief and are then determined to have been eligible for forgiveness under PSLF, we’ll adjust your loan and apply the PSLF discharge. The PSLF discharge may provide a refund on certain eligible payments made after the borrower has already made 120 payments.

    How long do I have to apply for debt relief?

    You’ll have until Dec. 31, 2023, to submit your application for student loan debt relief.

    Is there a paper version of the debt relief application?

    Initially, the application will be available only online. A paper version of the form will be made available at a future date, and you’ll have until Dec. 31, 2023, to apply.

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