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On Aug. 24, 2022, the Biden administration unveiled its federal student loan forgiveness plan in which millions of borrowers could qualify for up to $20,000 in student debt cancellation. Those who have federal student loans and meet the income criteria are eligible to apply for forgiveness or will receive automatic cancellation. Borrowers need to know the ins-and-outs of their balance as well as the forgiveness plan's details. Here's everything you need to know, from important deadlines to how forgiveness will impact you to everything else in between.
Hanneh Bareham specializes in everything related to student loans and helping you finance your next educational endeavor. She aims to help others reach their collegiate and financial goals through making student loans easier to understand.
Heidi Rivera is a student loans writer for Bankrate. She began her journey in the personal finance space in 2018 and is passionate about collecting data and creating content around higher education and student loans.
Chelsea has been with Bankrate since early 2020. She is invested in helping students navigate the high costs of college and breaking down the complexities of student loans.
Only federally owned student loans qualify for forgiveness. Privately owned Federal Family Education (FFEL) and Perkins Loans that weren’t consolidated into federal Direct Loans prior to Sept. 29, 2022 are among those not eligible.
Borrowers are eligible for up to $10,000 in federal student loan forgiveness if their adjusted gross income is under $125,000 annually. Married borrowers who file their taxes jointly and make under $250,000 a year are also eligible for up to $10,000.
You can find your adjusted gross income on line 11 of IRS form 1040.
Current and former Pell Grant recipients are eligible for up to $20,000 if they meet the income requirements.
Plus, payments made on federal loans during the student loan payment pause — which started on March 13, 2020 and was recently extended through Dec. 31 of this year — may be eligible for a refund. If your current balance is lower than the amount of debt relief you can receive, the payments you made will be refunded up to your maximum relief amount.
Only federally owned student loans qualify for forgiveness. Privately owned Federal Family Education (FFEL) and Perkins Loans that weren’t consolidated into federal Direct Loans prior to Sept. 29, 2022 are among those not eligible.
To maximize your potential forgiveness amount, it’s important to meet all required deadlines. If you fail to meet a deadline, you risk losing some of your forgiveness or may be disqualified from cancellation altogether.
The Department of Education released the student loan forgiveness application on the studentaid.gov website.
Ask your servicer if forgiveness is automatic.
Most must fill out the form for forgiveness.
Sign up for the Department of Education's email for updates.
Borrowers need to apply by Nov. 15 to receive forgiveness by the end of the student loan payment pause on Jan. 1.
Expected processing turnaround is 4 to 6 weeks.
Applications will still be accepted past this deadline.
Debt will be canceled before payments and interest renew.
Student loan payments and interest charges start back up for borrowers with remaining federal loan balances.
Defaulted federal loans will be restored to good standing.
Interest will no longer be set to zero percent.
Refunds not available for payments made after Dec. 31.
The final deadline to apply for federal student loan forgiveness is Dec. 31, 2023 for federal borrowers.
Applications won't be processed after this date.
Remaining debt must be repaid in full.
Refunds for eligible payments not offered past the date.
The Department of Education released the student loan forgiveness application on the studentaid.gov website.
Ask your servicer if forgiveness is automatic.
Most must fill out the form for forgiveness.
Sign up for the Department of Education's email for updates.
Borrowers need to apply by Nov. 15 to receive forgiveness by the end of the student loan payment pause on Jan. 1.
Expected processing turnaround is 4 to 6 weeks.
Applications will still be accepted past this deadline.
Debt will be canceled before payments and interest renew.
Student loan payments and interest charges start back up for borrowers with remaining federal loan balances.
Defaulted federal loans will be restored to good standing.
Interest will no longer be set to zero percent.
Refunds not available for payments made after Dec. 31.
The final deadline to apply for federal student loan forgiveness is Dec. 31, 2023 for federal borrowers.
Applications won't be processed after this date.
Remaining debt must be repaid in full.
Refunds for eligible payments not offered past the date.
Only co-signers of federal Grad or Parent PLUS loans will see changes in their co-signed loan should the original loan holder meet forgiveness eligibility requirements. Co-signers of private student loans will see no changes in their co-signed balance.
If you took out federal loans before June 30, 2022, and received a Pell Grant as part of your financial aid package, you’re eligible for up to $20,000 in federal debt cancelation.
You aren’t eligible for federal student loan forgiveness. Check with your private student loan servicer to see if it offers payment hardship relief or loan forgiveness. However, if you have a mix of both federal and private loans, you could get up to $20,000 in federal forgiveness if you meet the requirements.
You’re eligible for a refund on any payments made on your federal loans during the student loan payment pause (from March 13, 2020, through Dec. 31, 2022). The Department of Education will automatically refund payments after the initial round of forgiveness.
If you have privately owned Federal Family Education (FFEL) or Perkins Loans and didn’t consolidate them — or apply for consolidation — into Federal Direct Loans by Sept. 29, 2022, then you’re not eligible for federal forgiveness.
The student loan payment pause will expire on Dec. 31, 2022, meaning that federal student loan payments will begin again on Jan. 1, 2023, and interest rates will no longer be at zero percent. However, borrowers with delinquent payments and those whose loans were in default as of March 13, 2020, will be restored to good standing status when payments resume.
Apply by the Nov. 15 deadline to qualify for forgiveness before payments restart. If you fail to apply after the deadline, you’ll have to start making payments on your loans while waiting for the application to process. Plus, any payments made after Dec. 31 will be ineligible for a refund as the forbearance period will no longer be in effect.
To stay up-to-date with payments restarting, contact your loan servicer and sign up for ED updates so you don’t fall behind. If managing your remaining balance concerns you, consider refinancing to score a lower interest rate after receiving forgiveness.
However, while refinancing your loans could help you save money, it’s not for everyone. It should be a last-resort option as borrowers lose all federal benefits — including forgiveness — after refinancing with a private lender.
Here’s what we know so far about Biden’s broad student loan forgiveness plan.
Borrowers who combined their student loans with their spouse’s may soon see relief.
Biden’s student loan forgiveness plan is expected to impact 43 million borrowers.
Biden’s long-awaited forgiveness plan impacts borrowers earning less than $125,000.
Here’s what we know so far about Biden’s broad student loan forgiveness plan.
Borrowers who combined their student loans with their spouse’s may soon see relief.
Biden’s student loan forgiveness plan is expected to impact 43 million borrowers.
Biden’s long-awaited forgiveness plan impacts borrowers earning less than $125,000.
If your loans are from the Department of Education and you had to apply through the FAFSA, they’re federal. You can find the information on studentaid.gov.
Private student loans are available through private lenders, banks and credit unions. Check your bank statements or credit report to see which lenders you’ve applied or made payments to.
You can check your financial aid information — including past need-based aid, like Pell Grants — on your studentaid.gov account dashboard. To log in, you’ll need your FSA ID or basic account information to retrieve your ID.
Since March 13, 2020, federal student loan payments have been stalled, and interest rates have been set to zero percent. After Dec. 31 of this year, payments will resume, interest rates will be restored to their original percentages and interest accrual will resume.
Those who have loans in default or have delinquent payments will also be returned to good standing status once payments begin. Contact your servicer for more information.
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