Student loan debt has become a significant burden for many Americans, impacting their ability to achieve financial stability and pursue their dreams. Recognizing this issue, President Biden has taken historic action to provide relief to borrowers by forgiving a portion of their student debt. In this comprehensive guide, we will explore the eligibility criteria, loan types covered, application process, and additional relief measures associated with the student loan debt relief program.

  1. Borrower Eligibility

To qualify for student loan debt relief, borrowers must meet certain criteria based on their income and receipt of Pell Grants. The following eligibility guidelines apply:

1.1 Income Threshold

  • Single borrowers with an Adjusted Gross Income (AGI) under $125,000 or married couples filing jointly with an AGI under $250,000 are eligible for debt cancellation.
  • Income levels will be determined based on the lower of either 2020 or 2021 AGI, which can be found on Line 11 of IRS Form 1040.

1.2 Pell Grant Recipients

  • Borrowers who received Pell Grants and meet the income criteria are eligible for up to $20,000 in student debt cancellation.
  • Borrowers who meet the income criteria but did not receive Pell Grants are eligible for up to $10,000 in debt cancellation.

It is important to note that the debt relief program aims to provide assistance to those who need it the most, targeting borrowers with lower incomes.

  1. Loan Eligibility

Federal student loans disbursed by the U.S. Department of Education prior to July 2022 are eligible for debt cancellation under the student loan debt relief program. The eligible loan types include:

  • Undergraduate loans
  • Graduate loans
  • Parent PLUS loans

It is crucial to understand that private student loans do not qualify for the program. Therefore, borrowers with private loans should explore alternative options for debt relief.

  1. How It Will Work

The implementation of the student loan debt relief program involves several steps that borrowers need to be aware of. The process can be summarized as follows:

3.1 Application Process

  • The Department of Education plans to release an application for borrowers to submit their income and loan information in early October.
  • It is essential to submit the application by November 15 to ensure processing before the payment pause expires in January 2023.
  • The application for debt relief can be accessed on the website.

3.2 Automatic Loan Forgiveness

  • Some borrowers may have their loans automatically forgiven without the need to submit an application.
  • The Department of Education may process loan forgiveness using information from other programs, notifying eligible borrowers directly.
  • If borrowers have already received a notification from the Department of Education, there is no need for further action.

3.3 Contact Information Update

  • Borrowers are encouraged to ensure their contact information is up to date in the federal student loan portal.
  • This step is crucial in receiving timely updates and notifications regarding their loan forgiveness status.

3.4 Payment Pause Extension

  • The pause on student loan repayment, interest, and collections has been extended until December 31, 2022.
  • Payments will resume in January 2023.
  • Borrowers do not need to take any action to keep their student loans on pause; it will be automatic.
  1. Additional Relief Measures

In addition to student loan debt cancellation, the student loan debt relief program includes several other measures aimed at providing further relief to borrowers:

4.1 Income-Driven Repayment Plan Cap

  • Monthly payments for undergraduate loans will be capped at 5% of a borrower’s discretionary income, significantly lower than current plans.
  • This cap will reduce the average annual student loan payment by over $1,000 for both current and future borrowers.

4.2 Increase in Non-Discretionary Income Limit

  • Borrowers earning under 225% of the federal poverty level, equivalent to the annual income of a single borrower earning a $15 minimum wage, will not be required to make monthly payments.

4.3 Monthly Interest Loan Forgiveness

  • As long as minimum payments are being made, even if the payment is $0, monthly interest will not accrue on the loans.
  • This measure prevents loan totals from growing over time, providing borrowers with long-term financial relief.

4.4 Future Loan Forgiveness

  • Original loan balances of $12,000 or less will be forgiven after 10 years of payments, instead of the previous 20-year requirement.
  • This change will allow nearly all community college borrowers to become debt-free within 10 years.


President Biden’s student loan debt relief program aims to alleviate the financial burden faced by borrowers and provide them with opportunities to pursue their dreams and secure their futures. By understanding the eligibility criteria, loan types covered, the application process, and additional relief measures, borrowers can take advantage of this historic initiative. Stay informed and take the necessary steps to benefit from the program. Remember, relief is within reach.

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