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On August 24, 2022, the Biden Administration and the U.S. Department of Education announced the student debt reform plan with student loan forgiveness measures. The plan has already been enacted, and borrowers could see forgiveness measures beginning in early October 2022.

Here is an overview of the latest changes to student loan forgiveness policies and how to claim relief.

Loan Forgiveness for Pell Grant Recipients

Pell grant recipients that meet the income threshold can receive up to $20,000 of forgiveness on loans held by the Department of Education.

Eligibility Requirements

• Received Pell Grant

• Meet Income threshold: income of less than $125,000 for individuals or $250,000 for households

Action Required to Claim Forgiveness

• Forgiveness may be received automatically because relevant data is already available with the U.S. Department of Education

• If data isn’t available, the application will be launched in early October 2022

  • Once the application is complete, expect relief within 4-6 weeks

Loan Forgiveness for Low- and Middle-Income Families

Borrowers that are not Pell-grant recipients can receive up to $10,000 of loan forgiveness if they meet the income threshold requirements.

Eligibility Requirements

• Meet Income threshold: income of less than $125,000 for individuals or $250,000 for households

Action Required to Claim Forgiveness

• Forgiveness may be received automatically because relevant data is already available with the U.S. Department of Education

• If data isn’t available, the application will be launched in early October 2022

  • Once the application is complete, expect relief within 4-6 weeks

Loan Forgiveness for Employees of Nonprofits, the Military, and Federal, State, Tribal Governments

A temporary change has been made to the Public Service Loan Forgiveness Program (PSLF) that allows qualifying employees to receive full forgiveness on student loan balances through October 31, 2022.

Starting November 1, 2022, enrollments in the PSLF Program will no longer be eligible for full forgiveness.

Eligibility Requirements

• A full-time employee of a nonprofit, the military, or work for federal, state, tribal, or local government.

• Already made 120+ payments on loan balance

• Enrollment in PSLF Program

Action Required to Claim Forgiveness

• Enroll before November 1, 2022

Proposed Changes

The Student Debt Relief Plan also outlined proposed changes that could be enacted soon. We will closely monitor the situation and update this page as information is released.

Reduction in Years of Payments Required to Obtain Loan Balance Forgiveness

Student loans with balances of $12,000 or less are eligible for forgiveness after 20 years of payments. Under the new plan, there is a proposal to reduce the required time to 10 years of payments.

Questions?

Have questions about your eligibility or how to apply? Our finance experts are here to help. Contact us.