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.
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.
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.
Here’s what you can do to get ready and to make sure you get our updates:
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.
Visit the one-time student loan debt relief page for more information.
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.
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.
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.
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).
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.
The following types of federal student loans with an outstanding balance as of June 30, 2022, are eligible for relief:
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.
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.
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.
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.
Yes. All ED-held loans, including PLUS loans for parents and graduate students, are eligible for 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.
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 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.
Your loan servicer will notify you when the relief has been applied to your account, with details on how the relief was 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.
Yes. You will automatically receive a refund of your payments during the payment pause if:
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.
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.
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.
For borrowers with multiple loans, we’ll apply the relief in the following order:
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:
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:
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.
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.
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.
The online application will be available by early October 2022.
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.
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.
You’ll have until Dec. 31, 2023, to submit your application for student loan debt relief.
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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