Student Loans

Debt Relief: An Overview

On August 24, 2022, President Joe Biden announced an effort to provide relief through debt cancellation to qualified borrowers. Since then, many questions have arisen. Here, we seek to address some of the most frequent questions:

Debt Relief: An Overview

How much student loan debt is eligible for cancellation?

Federal student loans recipients are eligible to receive up to $10,000 in debt cancellation. Additionally, Pell Grant recipients are eligible to receive an additional $10,000 for a total of up to $20,000 in debt cancellation. If the borrower owes less than that amount, only the remaining balance will be canceled.

Who is eligible for student loan cancellation?

Borrowers who earn less than $125,000 per year and households earning less than $250,000 per year are eligible for debt cancellation. This is determined by the information provided in your 2021 income tax filing.

Which student loans are eligible for forgiveness?

Federal qualified loans for undergraduate degrees, graduate degrees, and trade schools are eligible for forgiveness.

If I take out a student loan right now, will it qualify for forgiveness?

Only loans that existed before July, 2022 are eligible for cancellation. Future loans are not covered by this plan.

Will I be taxed for having this debt forgiven?

Borrowers will not be taxed for having this debt forgiven. Additionally, borrowers are not required to declare this relief as income on future income tax returns.

What do I have to do to get this debt canceled?

Borrowers should go to to sign up for alerts and updates, as well as to identify themselves as eligible for student debt forgiveness. The White House has announced borrowers will be able to begin applying for forgiveness in early October of 2022.

When will the student loan repayment pause end?

The student loan repayment pause has been extended until December 31, 2022. Biden has stated this will be the final student loan repayment pause.

Will I receive a check?

Forgiveness will be applied directly to existing debt. No check will be issued to borrowers.

What if I already paid my student loans off?

This plan does not retroactively cover debt that has already been paid.

Loan Repayment Options

What changes exist for borrowers who have to resume payments after December 31, 2022?

Currently, Income-Driven Repayment plans (IDR) are based on 10% of the government’s assessment of the borrower’s discretionary income. Under Biden’s plan, IDR plans for undergraduate loans are now lowered to 5% of the borrower’s discretionary income.

What benefits exist for low-income borrowers?

The government will prevent loan balances from growing while low-income borrowers make monthly payments by covering the interest on those payments. Low-income borrowers who make approximately $15/hour or less will not be required to make payments. The loan is not canceled, but the government acknowledges that at that wage, borrowers are likely not in a financial situation where they can make payments. Payments will resume when the borrower’s salary increases. If a borrower is enrolled in an Income-Driven Repayment plan (IDR), monthly payments made in that plan – even if it is a $0 payment – will count as qualifying payments toward Public Service Loan Forgiveness.

What changes exist for borrowers in the Public Service Loan Forgiveness (PSLF) program?

Borrowers in the PSLF may be eligible to have all their student debt forgiven. Biden’s changes to the PSLF program means while up to 99% of applicants were denied PSLF in the past, it is much more likely applicants will receive PSLF now. If you have applied for PSLF in the past and been denied, please apply again. This application must be completed before October 31, 2022 to be eligible for the changes to the program!

Information for Future Borrowers

How are future borrowers protected?

The Department of Education has re-established the Enforcement Unit at the Office of Federal Student Aid. The purpose of this unit is to hold creditors accountable for predatory lending. The Enforcement Unit will also publish an annual watchlist of programs with the worst debt levels in the country. Additionally, the Enforcement Unit will request Institutional Improvement Plans from the programs with the worst debt levels in the country to outline how these programs intend to bring down the level of debt incurred by students. A rule has also been proposed to hold career programs accountable for ensuring students do not graduate with excessive debt.

Frequently Asked Questions

Are Parent Plus covered in this plan?

Currently, information is unclear regarding Parent Plus Loans. At this time, The Wall Street Journal states that Parent Plus Loans are covered based on information they received from the White House.

How do I know if I had a Pell Grant?

Student borrowers can check their federal aid history at with an FSA ID. If a borrower does not know their FSA ID, it can be reset using the link on the website.

Will my student loans be canceled if they are currently in default?

Student loans in default will be canceled if borrowers apply for the Fresh Start student loan program at and arrange to make payments. This application must be completed before December 30, 2023. It is recommended that applications be completed as soon as possible.

How is student debt relief being financed by the government?

Because of the recently-passed Inflation Reduction Act, Medicare can now negotiate with prescription drug companies. The government estimates it will save roughly $300 billion through these negotiations. The cost of student debt forgiveness is estimated to be roughly $300 billion.


Biden is canceling up to $10K in student loans, $20K for Pell Grant recipients

Turner & Carrillo

Who qualifies for Biden’s plan to cancel $10,000 in student debt?

Douglas-Gabriel & Stein

FACT SHEET: President Biden Announces Student Loan Relief for Borrowers Who Need It Most

V Interesting with V Spehar: Everything You Need to Know About Student Loan Forgiveness on Apple Podcasts


3 things you need to know about Biden’s student loan announcement


The Biden-Harris Administration’s Student Debt Relief Plan Explained

Federal Student Aid – US Dept. of Education

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