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Student Loan Forgiveness Plan and FAQs

Student Loan Forgiveness Plan and FAQs

1.5x minute read

President Biden unveiled a student debt relief plan that provides a one-time student loan debt cancellation which targets low and middle-income families.

The U.S. Department of Education will provide up to $10,000 in debt relief to non-Pell Grant recipients and up to $20,000 for Pell Grant recipients. Borrowers making less than $125,000 per year (single) or less than $250,000 per year (married or head of household) are eligible for relief.

The plan also extends the moratorium on federal student loan payment through December 31, 2002. A new rule was also proposed to create a new income-driven repayment plan to reduce future payment for lower and middle-income borrowers.

The DOE provided more information about the one-time student loan debt relief including FAQs. Almost 8 million borrowers are eligible to receive student loan debt relief automatically because their income data is readily available to the DOE. If the DOE doesn’t have an individual’s data, they can complete a loan forgiveness application, which will be available online by early October 2022. All eligible borrowers are encouraged to apply. Once the application is completed, borrowers should receive debt relief within 4-6 weeks. Applications must be submitted by December 31, 2023.

Download the bulletin for more details.


Additional Resource

Student Loan Forgiveness Plan Infographic

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National Insurance Services is not a law firm and no opinion, suggestion, or recommendation of the firm or its employees shall constitute legal advice. Readers are advised to consult with their own attorney for a determination of their legal rights, responsibilities and liabilities, including the interpretation of any statute or regulation, or its application to the readers’ business activities.

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Scott Fritz

Scott Fritz

Scott Fritz always has a willingness to help others, which has made him an ideal candidate for working in the public sector benefits arena throughout his career. He’s a team player and enjoys strategizing, problem solving, and finding effective cost-saving solutions for his clients. As an Employee Benefit Consultant with National Insurance Services, Scott is responsible for the overall assessment and management of an employer’s benefit plans. He is a licensed insurance agent and works with schools, cities, counties, and community mental health organizations in Michigan and North Carolina.