What you need to know to claim your student loan forgiveness


After campaigning on the promise of debt relief (and receiving ample criticism from both borrowers and activists alike for his inaction), President Joe Biden has finally laid out his plan to address the growing problem of nationwide student debt — a number which currently sits at an easy $1.75 trillion.

The new forgiveness plan, announced just one week before student loan payments were set to begin again after a national pause during the COVID-19 pandemic, will forgive up to $20,000 for select borrowers and extends the repayment pause until Dec. 31. It’s being labelled a “three-part plan” to address the debt of lower- and middle-income borrowers, and also includes adjustments to income-based payment plans.

On the campaign trail, Biden pledged to completely cancel all undergraduate debt at two- and four-year public universities as well as private HBCU’s (Historically Black Colleges and Universities) and MSI’s (Minority Serving Institutions). This announcement is a much smaller commitment, but it might still have a significant impact on lower-income borrowers. (Politifact, a fact-checking initiative from the nonprofit Poynter Institute, labelled this announcement a “compromise” based on Biden’s promises.)

If you’re currently paying off a student debt and think you can qualify for this new form of relief, here’s what you need to know:

How can I qualify?

The new plan only applies to federal student loan borrowers in certain income brackets, as explained in the White House’s Fact Sheet:

Borrowers are eligible for this relief if their individual income is less than $125,000 ($250,000 for married couples). No high-income individual or high-income household – in the top 5% of incomes – will benefit from this action.

Every borrower making less than this amount annually is eligible for up-to $10,000 in debt relief.

In addition, federal loan borrowers who have taken out Pell Grants (need-based grants for low-income borrowers that don’t have to be repaid), can receive another $10,000 for a total forgiveness of $20,000.

What if I’m a current student?

As reported by NPR, current students and dependents (based off their parent’s or parents’ income) are also eligible. This relief plan does not apply to loans taken out after June 30, 2022.

If your parents or legal guardians took out Parent PLUS loans to help pay for your undergraduate degree, they can also claim $10,000 after meeting the other requirements.

What if I have less debt than that?

The debt relief plan will not credit any funds beyond the current amount of your loan. If you have a student debt load of less than $10,000, the White House will simply pay off your total debt.

Do you have to apply for loan forgiveness?

Not exactly. The student debt relief plan will apply automatically to qualifying accounts if the U.S. Department of Education already has your up-to-date income information on file.

If you’re not sure that’s the case, then it would be prudent to submit an official application once the option is live. That exact date hasn’t been announced yet, so the federal government suggests borrowers sign up for alerts on the U.S. Department of Education website.

A screenshot of the U.S. Department of Education subscription site. Below a box to submit your email, there is blue check mark next to the option

Sign up for alerts to stay up-to-date.
Credit: U.S. Department of Education

Make sure you select the option to be alerted to “Federal Student Loan Borrower Updates” before hitting submit.

When will this debt relief be applied to my account?

The Biden Administration hasn’t announced the exact date when relief will be applied to borrowers’ accounts.

How do I access my student loan repayment plan?

To get current information on your loans, go to the Federal Student Aid website, which may require patience since the site has been down due to high traffic. Here you can find a breakdown of what types of loans you’ve taken out and their original balance.

To actually pay off your loan balance through various repayment plans, you’ll need to visit your loan servicing provider. This may have changed recently, as the federal government shifted over loans on behalf of borrowers. Current servicing providers include MOHELA, Aidvantage, Nelnet, and OSLA servicing.

What else is changing for federal student loans?

The White House plan also includes some changes to the current process for repaying loans and claiming loan forgiveness through other means.

The Department of Education will propose a new version of its income-driven repayment plans (which adjust a borrower’s monthly payments based on what is feasible for their current income). The plan would cap monthly payments for undergraduate loans at 5 percent of the borrower’s “discretionary income” (you can calculate that on your own here), instead of the previous 10 percent, as well as adjust the amount of income used to calculate such repayments. As the White House explains, with these changes “no borrower earning under 225 percent of the federal poverty level—about the annual equivalent of a $15 minimum wage for a single borrower—will have to make a monthly payment.”

They’re not done there. Those proposals also include a change that would forgive loan balances after 10 years of payments for those with original loan balances of $12,000 or less (instead of the current 20 years), and cover unpaid monthly interest accumulated on income-driven repayment plans.

The Biden Administration also intends to fix and streamline the Public Service Loan Forgiveness (PSLF) program, which offers loan forgiveness for employees of U.S. U.S. federal, state, local, tribal government, or nonprofit organizations, allowing these borrowers to claim more credits

This story will be updated with new information as it becomes available.

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