Editor's Note: Since the writing of this article, the federal student loan payment pause has been extended into 2023 as the Supreme Court decides whether the Biden-Harris Administration’s Student Debt Relief Program can proceed. The U.S. Department of Education announced loan repayments may resume as late as 60 days after June 30, 2023.
You can now apply for a one-time cancellation of up to $20,000 on your federal student loan debt through an online form posted on the Federal Student Aid website.
The program provides eligible borrowers with full or partial discharge of federal loans up to $20,000 to Federal Pell Grant recipients and up to $10,000 to non-Pell Grant recipients.
Who qualifies? Individuals who made less than $125,000 in 2021 or 2020, and families that made less than $250,000 in 2021 or 2020.
Read on to learn more about applying for student loan forgiveness — and the deadlines you need to know.
Steps to Take to Apply for Student Loan Debt Cancellation
President Joe Biden announced a student loan forgiveness plan in August that would provide one-time debt relief to low- and middle-income families through $10,000 or $20,000 payments.
The form went live on October 17.
Nearly 8 million borrowers may be eligible to receive relief without applying for it because the DOE already has their income information. But if you are uncertain whether you fall into that group, it’s recommended that you fill out the application.
Qualified borrowers are advised to apply by mid-November in order to receive relief before the pause on all federal loan payments expires on December 31, 2022.
Following these steps will help the application process go smoothly:
Figure Out if You’re Eligible
People with federal student loans may qualify for up to $10,000 in debt relief, and Pell Grant recipients may get up to $20,000. Borrowers are eligible for this relief if their 2020 or 2021 individual income is less than $125,000 or $250,000 for households.
Federal Pell Grants are typically 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.
Submit Your Application
The application “is simple, easy, and you don’t need to log in or provide supporting documents to apply,” the White House tweeted on October 17.
“We’ll determine your eligibility and will contact you if we need more information,” says the FSA site. “Your loan servicer will notify you when your relief has been processed.”
A beta version of the application was released less than a week before the official application went live. Those who applied during that stage do not need to apply again, according to the White House. The form they submitted will be processed.
You’ll have until Dec. 31, 2023, to submit your application.
Refresh Your Contact Information
You do not need to log in with your student loan servicer to apply for debt relief, but it’s recommended that you make sure your contact information is up to date for notifications. If you don’t know who your federal student loan servicer is, find out now. These companies work with the DOE on the administration of your loans.
If you don’t have a StudentAid.gov account (an FSA ID), you should create an account to help you manage your loans.
A New Deadline for Loan Debt Payments
Everyone who is paying down their federal student loans got a pause in payments starting in March 2020. The deadline to resume payments has been extended more than five times.
“To ensure a smooth transition to repayment and prevent unnecessary defaults,” President Biden said he will extend the pause one more time, through Dec. 31, 2022, with payments resuming in January 2023.
Biden said this past August that there will be no more extensions after his final one.
Recommended: How to Prepare for the End of Federal Student Loan Relief
Changes in Eligibility for Public Service Forgiveness
Along with extending the deadline for loan repayments and creating a one-time federal loan relief payment, President Biden made changes to the Public Service Loan Forgiveness program.
Borrowers who are employed by nonprofits, the military, or federal, state, tribal, or local government may be eligible to have all of their student loans forgiven through the existing Public Service Loan Forgiveness (PSLF) program. This is because of time-limited changes that waive certain eligibility criteria in the PSLF program.
Anyone interested in this opportunity needs to take action immediately. These temporary changes expire on October 31, 2022. For more information on eligibility and requirements, and to apply, go to PSLF.gov .
What About Opposition to the Biden Loan Forgiveness Program?
Biden’s federal student loan forgiveness plan has not met with universal approval. Some say that Biden does not have the authority to institute the plan; others criticize the cost to the economy. The White House said in August that canceling the federal debt will cost the government $240 billion over the next decade. Other estimates have put the price higher.
In late September, six states — Arkansas, Iowa, Kansas, Missouri, Nebraska, and South Carolina — filed a lawsuit to stop the plan, saying the Biden administration overstepped its regulatory authority.
Various court challenges and politicians’ petitions are moving forward. However, as of October 18, the opposition did not appear to have the legal authority to stop the debt cancellation plan from going forward.
Recommended: What Biden’s Student Loan Forgiveness Means for Your Taxes
While federal student loan cancellation of up to $20,000 will be sent to about 8 million people automatically, there is now an online application for anyone who wants to apply and meets the income eligibility requirements.
You may want to take steps to get on top of all your student loan debt. Only federal student loans are eligible for cancellation, and only for those who meet certain income requirements. Refinancing your student loans — or what’s left of your student loans after forgiveness — might lead to lower payments, especially as interest rates are rising from historic lows. Explore student loan refinancing with SoFi to find out your options. Just be aware that after you refinance, that amount is no longer eligible for forgiveness.
Do you need to apply for the student loan forgiveness?
Nearly 8 million borrowers may be eligible to receive relief without applying — unless they choose to opt-out — because the necessary income data is already available to the DOE.
You may receive the one-time debt cancellation on your federal student loan if you filed the necessary income data through a Free Application for Federal Student Aid (FAFSA) in the last two years or an income-driven repayment application that uses income data from tax years 2021 or 2020.
But if you are at all unsure whether this applies to you, it’s recommended that you fill out an application online .
How will I know if I qualify for student loan forgiveness?
You will either automatically receive forgiveness on your federal student loan or you’ll receive it after you fill out an application online. You will be notified through an email or text if you qualify and, later, you will be informed by your loan servicer once the money is deducted from what you owe.
What types of student loans will be forgiven?
Only federal loans are eligible for these forgiveness programs, not private student loans. Subsidized loans, unsubsidized loans, parent PLUS loans, and graduate PLUS loans held by the DOE are eligible.
Consolidation loans are also eligible for relief, as long as all of the underlying loans that were consolidated were DOE-held loans and were disbursed on or before June 30, 2022. Additionally, consolidation loans comprised of any FFEL or Perkins loans not held by DOE are also eligible, as long as the borrower applied for consolidation before Sept. 29, 2022.
Do parents get student loan forgiveness?
All DOE-held loans, including PLUS loans for parents and graduate students, are eligible for relief, according to the Biden Forgiveness Plan.
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SoFi Student Loan Refinance
If you are looking to refinance federal student loans, please be aware that the White House has announced up to $20,000 of student loan forgiveness for Pell Grant recipients and $10,000 for qualifying borrowers whose student loans are federally held. Additionally, the federal student loan payment pause and interest holiday has been extended beyond December 31, 2022. Please carefully consider these changes before refinancing federally held loans with SoFi, since the amount or portion of your federal student debt that you refinance will no longer qualify for the federal loan payment suspension, interest waiver, or any other current or future benefits applicable to federal loans. If you qualify for federal student loan forgiveness and still wish to refinance, leave unrefinanced the amount you expect to be forgiven to receive your federal benefit.
CLICK HERE for more information.
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income-Driven Repayment plans, including Income-Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.