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Student Loan Forgiveness 101

On August 24, 2022, President Biden announced that low- and middle-income individuals will qualify for the student loan forgiveness plan. If you have student loans, it can be confusing trying to find the facts about the plan and how it can apply to you. This blog will help deliver the basics so that you are able to understand the situation a bit better.

The Basics

  • Any individual holding federal student loans that earns an income less than $125,000 a year, or $250,000 for married couples filing jointly, will qualify for $10,000 worth of debt cancellation. 
    • Those that are still dependents will qualify based on their parents’ income.
  • Those who received Federal Pell Grants will also qualify for an additional $10,000 debt cancellation, for a total of $20,000. Not sure if you received a Pell Grant? Check your account at and look at the "My Aid" page to see a list of your loan types. 
  • The current payment pause will be extended until December 31, 2022.

How do you receive student loan forgiveness?

According to the Federal Student Aid office, nearly 8 million people may be able to receive relief automatically because of relevant income data available to the Department of Education. If the Department of Education does not have your income data, an application will be announced early October.  While you wait for the application process to be announced, be sure to verify your income (or your parent's income if you're a dependent) to be sure you qualify.

If you are a Pell Grant recipient, be sure you have your records up to date on your FAFSA profile. To get updates on the release of the application, click here to sign up for the Department of Education subscription under "Federal Student Loan Borrower Updates." 

Other Notes

The plan also proposes the following rules to make student loans more manageable for current and future borrowers. These rules have not been put in place yet, but the current administration is working hard to quickly implement these improvements:

  • Borrowers with original loan balances of $12,000 or less will have their balances forgiven after 10 years of payments (previously 20 years). 
  • The income level to be eligible as non-discretionary, thus protected from repayment, will be raised. Borrowers that earn under 225% of the federal poverty level will not have to make student loan payments.
  • Borrower’s unpaid monthly interest will be covered for as long as they make their monthly payments. This means that a borrower's loan will not grow from interest if they are making proper monthly payments.
  • Borrowers will only have to pay a minimum of 5% of their discretionary income (previously 10%).


Student loan forgiveness can be exciting for those with loans still on the books. Make sure to keep an eye out for any new information released about the forgiveness plan; here are some good resources to reference.

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