US DOE Student Loan Forgiveness

President Biden, Vice President Harris, and the U.S. Department of Education announced a three-part plan to help working and middle-class federal student loan borrowers’ transition back to regular payment as pandemic-related support expires. This plan includes loan forgiveness of up to $20,000. This page is a resource to answer questions and share updates. Additionally, more information is available at the one-time student loan debt relief site.  To be notified when the process has officially opened, sign up at the Department of Education subscription page.

Part 1: Final extension of the student loan repayment pause

To ensure a smooth transition to repayment and prevent unnecessary defaults, the Biden-Harris Administration will extend the student loan repayment pause a final time through December 31, 2022, with payments resuming in January 2023. Borrowers do not need to take any action; the extended pause will occur automatically.

Borrowers can get a refund for any payment (including auto-debit payments) made during the payment pause (beginning March 13, 2020). Contact the loan servicer to request that your payment be refunded.

Part 2: Providing targeted debt relief to low- and middle-income families

The U.S. Department of Education will provide up to $20,000 in debt cancellation to Pell Grant recipients with loans held by the Department of Education and up to $10,000 in debt cancellation to non-Pell Grant recipients. Borrowers are eligible for this relief if their individual income is less than $125,000 or less than $250,000 for households. Student loan relief is capped at the amount of outstanding debt, borrowers will not receive reimbursements. For example, if someone is eligible for $20,000 in relief, but has a balance of $15,000 remaining, $15,000 will be forgiven.

In addition, borrowers who are employed by non-profits, the military, or federal, state, Tribal, or local government may be eligible to have all their student loans forgiven through the Public Service Loan Forgiveness (PSLF) program. This is because of time-limited changes that waive certain eligibility criteria in the PSLF program. These temporary changes expire on October 31, 2022. Click here for or more information on eligibility and requirements or visit PSLF.gov.

Some borrowers will receive relief automatically based on income data available to the U.S. Department of Education, but everyone who is eligible is being encouraged to complete the application when it becomes available. An application is anticipated to be released in early October. Applicants can expect relief within 4-6 weeks of completing the application. Borrowers are advised to apply before November 15th in order to receive relief before the payment pause expires on December 31, 2022.

If you would like to be notified by the U.S. Department of Education when the application is open, please sign up at the Department of Education subscription page.

Part 3: Make the student loan system more manageable for current and future borrowers

The Biden-Harris Administration is proposing a rule to create a new income-driven repayment plan that will substantially reduce future monthly payments for lower- and middle-income borrowers. The rule would:

  1. Require borrowers to pay no more than 5% of their discretionary income monthly on undergraduate loans. This is down from the 10% available under the most recent income-driven repayment plan.
  2. Raise the amount of income that is considered non-discretionary income and therefore is protected from repayment, guaranteeing that no borrower earning under 225% 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.
  3. Forgive loan balances after 10 years of payments, instead of 20 years, for borrowers with loan balances of $12,000 or less.
  4. 4.      Cover the borrower's unpaid monthly interest, so that unlike other existing income-driven repayment plans, no borrower's loan balance will grow as long as they make their monthly payments—even when that monthly payment is $0 because their income is low.