The Biden administration’s student loan debt relief program launches in early October. While some details are still being worked out, here’s what we currently know.
Most federal student loans with outstanding balances on June 30, 2022, qualify for relief. Here are the specifics:
- The Department of Education will provide up to $20,000 in debt cancellation with loans held by the federal government to Pell Grant recipients, and up to $10,000 in debt cancellation to non-Pell Grant recipients.
- To be eligible for this relief, your 2020 or 2021 annual income must have been less than $125,000 (individual, or married but filing separately), or less than $250,000 (married couples filing jointly, or head of household).
The program will provide relief to many borrowers who have defaulted on their federal student loans.
While millions of borrowers will get debt relief automatically, most will need to apply.
“The vast majority of borrowers will need to apply for cancellation in order to see that benefit,” said Cecilia Clarke student loan expert at NerdWallet. “And that application is expected to be open the first couple of weeks of October.”
The online application will be available first, followed by a paper version.
The deadline for applying is December 31, 2023. But NerdWallet suggests doing it by November 15, so your application can be processed before repayment restarts in January.
More Info: The Student Loan Debt Relief Program Launches in Early October. Here’s What We Know. (This story includes an interview with NerdWallet’s Cecilia Clarke and Kyra Taylor, staff attorney at the National Consumer Law Center.)