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President Joe Biden recently made a historic announcement regarding student loan forgiveness: Federal borrowers who meet income requirements can get up to $20,000 in loan forgiveness.
However, many were left with questions about the finer details of the program. Use our student loan forgiveness calculator below to see if you qualify for loan forgiveness and how much of your debt could be forgiven.
Who is eligible for student loan forgiveness?
To qualify for this rebate program, you must have federal student loans and meet specific income requirements. Income limits are based on your adjusted gross income (AGI) for the 2020 or 2021 tax year. Individuals earning less than $125,000 per year (or $250,000 if filing jointly) are eligible. If you qualify in any of those years, you can get a pardon.
How much student loan debt can be forgiven?
If you meet the income criteria and owe money on federal student loans, you are eligible for $10,000 in student loan forgiveness, or up to your existing loan balance, whichever is greater. lower. If you also received a Pell Grant with your student loans, you are eligible for loan forgiveness of up to $20,000.
How to Apply for Biden’s Student Loan Forgiveness Program
Most borrowers will need to submit a simple application before their loan forgiveness can be processed. The app is expected to be released in early October. Subscribe to the Ministry of Education mailing list to be notified when the app is open.
After submitting an application, expect loan forgiveness in four to six weeks. The Ministry of Education will accept applications until December 31, 2023 and process them as they are received. However, if you want your loans canceled before payments resume on January 1, 2023, the department recommends submitting a request by November 15, 2022.
About 8 million borrowers will not have to do anything to obtain forgiveness. If the government has recent data on your income, it can automatically process the cancellation of your loan. If you’re not sure if this describes you, submit an application to be sure.
Other Student Loan Forgiveness Programs
While Biden’s student loan forgiveness program is the biggest loan forgiveness yet, there are other federal forgiveness opportunities you may qualify for. However, these programs generally have much narrower eligibility criteria and require years of repayment to qualify.
Civil Service Loan Waiver (PSLF)
Under the PSLF program, borrowers who work full-time at a nonprofit organization or government agency could have their loan forgiven after making 120 qualifying payments. Not all types of federal loans are eligible, and you must be enrolled in an eligible income-contingent repayment (IDR) plan to participate.
For more advice, use Federal Student Aid’s PSLF Helper Tool to search for qualified employers and confirm your eligibility.
Income-Based Refund Cancellation
There are several IDR plans offered by the Department of Education, each fixing your loan repayments at a percentage of your income. After making payments for 20 or 25 years, depending on the plan, you can have the remaining balance of your loan forgiven.
Some of these plans require you to meet certain income requirements, but others are open to anyone with eligible federal student loans.
Although IDR plans can lower your monthly payments, you often end up paying more interest than a standard repayment schedule since you’ve been in debt for at least 20 years. Federal Student Aid loan simulator can help you compare costs between different reimbursement plans.
Teacher loan forgiveness
Educators who work in low-income schools could have federal student loans forgiven under the Teacher Loan Forgiveness program. You must teach full-time at a low-income elementary or secondary school for five consecutive years to qualify for loan forgiveness of up to $17,500. Not all federal student loans qualify for this program.
Loan release programs
You could have your federal student loans canceled or waived under certain circumstances. For example, if your school closes, acts fraudulently, or you become severely and permanently disabled, your federal student loans could be wiped out.
Check out our full list of furlough programs to see if you might qualify.
Frequently Asked Questions (FAQ)
Are current students eligible for forgiveness?
Yes, you are entitled to forgiveness if you are still in school. Federal student loans disbursed before July 1, 2022 are eligible for cancellation whether you are in school or have never graduated.
What is the income limit for student loan forgiveness?
Federal borrowers who earned less than $125,000 in the 2020 or 2021 tax years are eligible. For those who filed taxes jointly or as head of household, the income limit is $250,000.
What types of student loans are eligible for forgiveness?
All student loans held by the federal government are eligible for this forgiveness program. This includes subsidized and unsubsidized direct loans, as well as PLUS loans taken out by parents or graduate students. Even if you defaulted on your federal loans, they are still eligible.
It is less certain what will happen to those with Federal Home Education Loans (FFEL) and Perkins loans that belong to private lenders. The federal government is working with third-party lenders to include these debts in the forgiveness measure, but more details have yet to be released. Borrowers can also consolidate their private federal student loans through a direct consolidation loan to be entitled to forgiveness.
If your loans were eligible for the Covid-19 payment pause, they are also eligible for this forgiveness opportunity. Private student loans are not eligible for forgiveness.
You have more questions ? Discover our full range Student Loan Forgiveness FAQs.