Biden Administration's Student Loan Debt Relief Plan FAQs

Updated as of September 15, 2022.

Eligibility Questions

Any federal student loans owned by the Department of Education and first disbursed on or before June 30, 2022 qualify for forgiveness. This includes Federal Direct, Parent PLUS, Grad PLUS, Perkins Loans, Direct Consolidation Loans, and defaulted loans from the previously listed loan types. Private student loans do not qualify. For more information please refer to this resource from the National Association of Student Financial Aid Administrators (NASFAA).

Federal Family Education Loan (FFEL) borrowers whose FFEL loans have been transferred to the Department of Education for servicing (so they are federally held) and have a first disbursement on or before June 30, 2022 are eligible.

The National Association of Student Financial Aid Administrators (NASFAA) website states: "Borrowers with privately held federal student loans, including FFEL, Perkins, and HEAL programs, can receive the loan cancellation by consolidating these loans into the Direct Loan program, according to the Department of Education. However, FFEL Joint Consolidation Loans, which are often referred to as spousal consolidation loans, are not eligible for consolidation into the Direct Loan program under current law."

If you are not sure if your loan is a FFEL loan you can go to Studentaid.gov and sign in with your FSA ID. Then, go to the “My Aid” tab, and search for your loan details.

According to Federal Student Aid (FSA), consolidation loans are eligible for forgiveness as long as all of the underlying loans that were consolidated were first disbursed on or before June 30, 2022. If a borrower consolidated their federal loans into a private loan, that consolidated private loan is not eligible.

Yes, currently enrolled students with outstanding federal student loans disbursed on or before June 30, 2022 are eligible for loan forgiveness. This means many students starting college in Fall 2022 likely will not benefit from loan forgiveness.

Adjusted Gross Income (AGI) of $125,000 or below for single tax filers; $250,000 or below for married tax filers or heads of households.

The National Association of Student Financial Aid Administrators (NASFAA) reports that it is their understanding that borrowers can choose either their 2020 or 2021 adjusted gross income (AGI) to meet the income qualifications. Borrowers who were dependent students in the 2021-22 year will be eligible for relief based on parental income, rather than their own income.

Up to $20,000 for student borrowers who received a Pell Grant in college.

Up to $10,000 for borrowers who did not receive a Pell Grant in college.

Up to $10,000 for Parent PLUS and Grad PLUS borrowers. If a Grad PLUS borrower also received a Pell Grant in their undergraduate studies they should be eligible for the additional $10,000. We will continue to research this.

According to the National Association of School Financial Aid Administrators (NASFAA) there are no conditions on receipt of the Pell Grant in order to be eligible for the $20,000 in loan forgiveness. The borrower could have received any amount at any time to be eligible for the additional $10,000.

While this question was not officially addressed in Federal Student Aid announcements, national news outlets are reporting that no, if a parent has a loan for their education as well as a parent PLUS loan, they will not be eligible for double the elimination. We will continue to research this.

Yes, eligible borrowers who paid off all or part of their federal student loans since March 13, 2020, will still qualify for Biden’s student loan forgiveness. Borrowers can request a refund by calling their loan servicer directly, according to the Federal Student Aid website.

Process Questions

If the Department of Education already has a borrower's income information on file, forgiveness should be applied automatically (applies to about 8 million borrowers).

For all other borrowers whose income information is not already on file with the Department of Education, an application process will be rolled out by the Biden Administration sometime in early October, and borrowers should apply by November 15 in order to benefit from loan cancellation before the federal payment pause ends. To receive newsletter updates from the Department of Education you can subscribe here.

According to The Institute of Student Loan Advisors (TISLA), no one will be calling borrowers about this initiative. You may receive emails from your student loan servicer or from the Department of Education. Any phone call is likely a scam. You will not have to pay a fee to get cancellation. Paying a fee will not move the process faster and is a scam.

No, this loan forgiveness will not be considered taxable income for federal tax purposes. A provision within the American Rescue Plan exempts all federal student loan forgiveness from taxation through the end of 2025. 

It is important to note that states may treat loan forgiveness as taxable income for state income taxes. A resource to learn more about this can be found here.

Yes, the deadline to apply for forgiveness (if required) will be December 31, 2023.