Biden-Harris Student Loan Relief Plan: Who Qualifies and How Much is Forgiven? 

Young couple on computer looking at student loan debt forgiveness

As pandemic-related financial support is phasing out, the Biden-Harris Administration is implementing an extensive plan involving several forms of student debt relief. Borrowers can receive up to $20,000 in debt forgiveness depending on certain factors relating to their loans, income, and other financial aid they’ve received. 

Here’s a look at the various initiatives involved with the plan, who qualifies, and how to go about claiming the relief. 

Is student loan repayment still paused? 

The student loan repayment pause has been extended a final time through Dec. 31, 2022. This extension is automatic – you do not have to apply or submit anything to postpone your payments. 

Who qualifies for student loan forgiveness? 

The relief is most heavily targeted to low and middle-income families, so Pell Grant recipients qualify for the highest amount of relief. Individuals with income under $125,000 or households with under $250,000 are eligible as follows: 

  • Pell Grant recipients with loans held by the U.S. Department of Education will have up to $20,000 in student debt canceled 
  • Non-Pell Grant recipients with loans held by the U.S. Department of Education will have up to $10,000 canceled 

Those who qualify may receive their debt relief automatically if the Department of Education is able to retrieve updated income data. If not, an application will be available early Oct. 2022. You can expect your relief to come into effect within 4-6 weeks after applying. It is encouraged to apply as soon as possible to receive it prior to the repayment pause expiration (end of the year). 

Sign up here to make sure you’re updated when the application is released. 

The Department of Education is still solidifying how to go about forgiving debt for those who went through private lenders. We will continue to provide updates here as they are announced. 

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

Employees of non-profits, the military, and those who work for federal, state, tribal, or local governments may qualify to have all of their student loans forgiven through the Public Service Loan Forgiveness (PSLF) program. 

These groups are only eligible to have the entirety of their student debt canceled through Oct. 31, 2022. See more details on the PSLF program here

Will there be student debt relief for future borrowers? 

The Biden-Harris administration is also working to create a new income-based repayment plan to make the lending process more manageable going forward. The proposed plan includes changes, such as:  

  • Reducing the amount of discretionary income required to pay on undergraduate loans to no more than 5% monthly (opposed to the current 10%) 
  • Raising the income threshold for what is considered non-discretionary income (which is protected from repayment) 
  • Forgiving loan balances after 10 years of payments (opposed to the current 20 years) 
  • Covering unpaid monthly interest – meaning as long as a borrower makes their monthly payments, their balance should not increase 
  • Speaking of interest, you may be interested in: Do I Qualify for the Student Loan Interest Deduction? 

This article was last updated on 9/5/2022. 

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