The Biden-Harris Administration’s Student Debt Relief Plan Explained

is Biden’s student loan forgiveness application here

Student Loan Debt Relief is Blocked

The courts have blocked our student debt relief program. We are currently unable to accept applications. These orders are being challenged.

The student loan payment pause will be extended until either the U.S. Department of Education or the court has resolved the litigation. The payments will resume 60 days later. Payments will continue after 60 days if the debt relief program is not implemented or the litigation is not resolved by June 30, 2023. Before prices resume, we will notify the borrowers.

COVID-19 Federal Student Aid and Emergency Relief

What does the program mean for you, and what’s next

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The U.S. Department of Education and President Biden announced a three-part plan to help middle-class and working-class federal student loan borrowers return to regular payments after pandemic-related support ends. The program provides loan forgiveness of up to $20,000. Many families and borrowers may wonder, “what do you have to do to claim this relief?”. More details will be announced over the next few weeks. Register at the Department of Education subscribes page to be notified when this process opens. To apply, you have until December 31, 2023.

Student Loan Debt Relief Plan by the Biden Administration

Part 1. Part 1.

The Biden-Harris Administration extended the student loan repayment suspension a few times due to the economic difficulties created by the pandemic. Since President Biden’s election, no federally-held loan holder has had to make a single loan payment.

The Biden-Harris Administration will prolong the pause for one last time until December 31, 2022. Payments will resume in January 2023. This is to ensure smooth repayment and avoid unnecessary defaults.

Most Frequently Asked Questions

What do I need to do to extend my student loan pause until the end of the current year?

  • No.

Part 2. Part 2.

The U.S. Department of Education will offer up to $20,000 in debt relief for Pell Grant recipients with loans held by the Department of Education and up to $10,000 to non-Pell grant recipients. This is to ease the transition back into repayment. If a borrower’s income is below $125,000, or $250,000 for a household, they are eligible for this relief. 

Non-profit borrowers, military personnel, and federal, state, Tribal, or local government might also be eligible for all student loans to be forgiven under the Public Service Loan Forgiveness program. These changes are temporary and will allow borrowers to meet specific eligibility criteria. These quick changes will expire on October 31, 2022. For more information about eligibility and requirements.

Most Frequently Asked Questions

How can I find out if I’m eligible for debt relief?

  • Your annual income must be below $125,000 for individuals or $250,000 for married couples or heads of households to be eligible.
  • You may be eligible for $20,000 debt relief if you have received a Pell Grant from college and meet the income threshold.
  • You may be eligible for $10,000 debt relief if you do not meet the income threshold and have not received a Pell Grant during college.

What do “up-to” in “up-to $20,000” and “up-to $10,000” refer to?

  • Your debt is the limit of your relief.
  • Example: If you have $15,000 left and are eligible for $20,000 debt relief, $15,000 will be your relief.

What are the steps to get debt relief?

  • Nearly 8,000,000 borrowers could be eligible for relief without having to apply unless they opt out. The U.S. Department of Education already has the relevant income data.
  • The Administration will launch an application in October for borrowers who don’t have income data from the U.S. Department of Education. To apply, borrowers must not upload documentation or have an FSA ID.
  • Most borrowers can expect relief in six weeks for most of them who apply.
  • Although we encourage all who are eligible to apply, there are 8,000,000 people for which we have data. They will be granted relief even if they opt out.
  • Borrowers should apply by mid-November to be eligible for relief before the payment pause expires on December 31, 2022.
  • Even after the December 31st, 2022, pause, the Department of Education will continue processing applications as they come in.

What is the Public Service Loan Forgiveness program?

  • After 120 payments, the Public Service Loan Forgiveness program (PSLF), forgives any remaining federal student loan balance. It is available to anyone who works full-time for federal, state, or Tribal government, the military, or any other qualifying non-profit.
  • Temporary changes ending on October 31, 2022, provide flexibility and make it possible to get forgiveness. They allow borrowers credit for past repayments that they otherwise would not be eligible for PSLF.
  • No eligibility for this treatment will be given to enrollees who have not enrolled by Nov. 1, 2022. We urge borrowers to sign-up today. 

Part 3. Part 3.

The U.S. Department of Education has had income-based repayment plans for a long time. The Biden-Harris Administration proposes a rule that creates an income-driven repayment plan to significantly reduce future monthly payments for lower- or middle-income borrowers.

This rule would be:

  • Require borrowers not to pay more than 5% of their discretionary monthly income on undergraduate loans. This is down from 10% under the most recent income-driven repayment plan.
  • Increase the income that is non-discretionary and is therefore protected from repayment. This guarantees that no borrower who earns less than 225% of the federal poverty line (about the equivalent of a $15 minimum income for a single borrower) will have to make a monthly installment.
  • Borrowers with less than $12,000 in loan balances will be able to forgive their loan balances for ten years instead of 20.
  • Pay the monthly interest of the borrower. This means that, unlike other income-driven repayment programs, no loan balance will increase as long as the borrower makes their monthly payments.

The Biden-Harris Administration works quickly to improve student loans. Keep checking this page for the latest information. Register for email updates from the U.S. Department of Education to be among the first to hear about progress.

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