The Biden Administration's Student Loan Debt Relief Plan

Final Extension of the Student Loan Repayment Pause

Payments on federal student loans will remain paused until December 31, 2022, at which point student loan payments will resume. This will most likely be the last extension of the pause and there is nothing you need to do at this time as this extended pause will occur automatically.

Debt Forgiveness to Individuals with Income Less Than $125,000 or $250,000 for Households

The U.S. Department of Education will provide each individual up to $10,000 or $20,000 in debt cancellation. For individuals who were Pell Grant recipients, they are eligible for up to $20,000 in forgiveness while all others who meet the income requirement are eligible for up to $10,000 in forgiveness. It is important to note that borrowers are eligible for forgiveness if their individual income is less than $125,000 or $250,000 for households.


  • Annual income must have fallen below:

      • $125,000 (for individuals) or

      • $250,000 (for married couples or heads of households)

  • All federal student loans issued prior to this academic year will be eligible for forgiveness, including loans taken out for trade school, community college, bachelor’s degrees, graduate school, and parent PLUS loans.

  • Cutoff Date for Eligible Student Loan is June 30th

Forgiveness Amount

  • Forgiveness of up to $20,000

      • Received Pell Grant in College and

      • Meets Income Threshold

  • Forgiveness of up to $10,000

      • Did Not Receive Pell Grant in College and

      • Meets Income Threshold

  • Forgiveness is Capped at the Amount of Your Outstanding Balance

      • If you are eligible for $10,000 but your remaining balance is only $6,000, you will only receive $6,000 in debt forgiveness.

What to Do in Order to Receive Loan Forgiveness

More details will become clear in the coming weeks as there is no official application at this time. I strongly encourage anyone to sign up at the Department of Education subscription page to receive updates on when an official application becomes available. Once a borrower completes an application, they can expect their loan forgiveness to take effect within 4-6 weeks. Because of this turnaround time, it is recommended to apply for forgiveness by mid-November for the forgiven amount to be applied before payments resume in January. However, there is no hard deadline to fill out the application and applications will continue to be processed after pause expires on December 31, 2022.

What is the Public Service Loan Forgiveness Program (PSLF)?

The Public Service Loan Forgiveness (PSLF) program forgives the remaining balance on your federal student loans after 120 payments working full-time for a qualifying employer. With a high number of applications being rejected because of processing errors and number of payments being deemed unqualified, a “limited PSLF waiver” was granted but will be ending on Oct. 31, 2022. This “limited PSLF waiver” provides the borrower the opportunity to receive credit for past payments towardness forgiveness that wouldn’t normally qualify as PSLF. However, adding past payments that didn't previously qualify only apply to types of loans that weren't PSLF (such as those made to FFEL and Perkins Loans) at the time of making a qualified payment while working at qualified employer. Enrollments on or after Nov. 1, 2022 will not be eligible and it is strongly encouraged for borrowers to sign up today.

Changes to Income-Driven Repayment Plans

The new rule would limit borrowers with undergraduate loans to pay no more than 5% of their discretionary income while also increasing what is considered non-discretionary income to 225% of the federal poverty level which is equivalent to a $15 minimum wage job. The new rule will also forgive loan balances after 10 years for borrowers with original loan balances of $12,000 or less. It will also cover unpaid monthly interest which will keep loan balances from growing higher than the original loan amount.

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