Note: Extended Public Service Loan Forgiveness Waiver ends October 31, 2022!!
Time-limited changes to the public service loan forgiveness program allow borrowers to qualify for forgiveness during time periods they did not previously qualify.
If you have worked in a non-profit organization or as a government employee, please make sure you have completed your waiver to qualify for public service loan forgiveness. You must submit your application by Oct 31st. To begin to see if you qualify, please go to studentaid.gov ASAP and use this Help Tool.
One-time Federal Student Loan Debt Relief
The Biden-Harris Administration recently announced the Student Loan Debt Relief program and it has seen a rocky road since the announcement. Everyone has questions, and unfortunately, none of the answers are quite set in stone just yet. Here are some quick tidbits to keep you updated:
What are the income qualifications?
Those who earn under $125k (if you are filing your taxes as single) or $250k (for married filing jointly). If you are even a dollar over this limit, no loans will be forgiven. This limit will be based on your 2020 and 2021 tax returns. (Your adjusted gross income is what qualifies you, so look at line 11 of your tax return on IRS Form 1040).
What loans qualify for forgiveness?
Direct Loans held by the federal government will qualify. This includes both undergraduate and graduate loans, Federal Family Education Loans (FFEL) held by the Education Department (ED), Parent PLUS loans, and Federal Perkins Loans held by ED. These loans must have been taken out before June 30, 2022. If any of these loans were consolidated or if any FFEL Loans were held privately but consolidated by September 29, 2022, they will qualify.
How do I know what kind of loans I have?
Log in to studentaid.gov and go to “My Aid”. You will be able to see a breakdown of all the loans you carry. If the name of your loans has the words “Direct”, “FFEL”, or “Perkins” in the name and the servicer is listed as “Dept. of Ed” or “Default Management System” then they are serviced by the government and should qualify if all other conditions are met.
How much is forgiven?
If your income and loan type qualifies for forgiveness, then you will receive $10,000 in debt relief. If you received a Federal Pell Grant at some point during your education, you will receive $20,000 of debt relief.
If you have $8,000 of qualified student loans remaining, you will only receive $8,000 of debt relief.
How do I get my loans forgiven?
Fill out the super easy and quick online application here. The information you provide in the application will either be approved and your debt relief will be applied or they will need to verify additional information from you. Make sure any communication you receive is verified and know that you NEVER have to pay for help on your federal student aid so be wary of any scams asking for a credit card or payment information of any kind.
Additional things you can do to monitor your forgiveness and application status:
1: Make sure you have a log in to studentaid.gov to monitor your loans and sign up for text and email alerts regarding student loan forgiveness.
2: You can get an email alert for updates on the program by signing up with the Department of Education. This will also be a good place to receive updates on potential changes to the program as there are several lawsuits out against the debt relief plan.
When will my loans be forgiven?
Forgiveness may begin as early as 6 weeks after you fill out the application but lawsuits trying to prevent the Student Loan Forgiveness Program are in action and may stop this process entirely.
When will we start making payments again?
You can expect to begin making payments on your student loans in January 2023, though this may get delayed again as the lawsuits preventing the debt relief may cause another extension.
Should I (or my kids) take out more student loans?
This debt relief plan only applies to loans that were taken out and distributed before June 30, 2022. There is absolutely no reason to take out student loans that you do not need at this time. This is a one-time-only relief plan as there is no indication that such debt relief will ever be available again.
We are all sitting at the edge of our seats to see if this program actually follows through and sees the light of day despite many efforts against it. We are rooting for its success!
For additional and up-to-date information, you can go to studentaid.gov.