Do I qualify for student loan forgiveness?
For must meet the following criteria in order to have some or all of your student loans forgiven:
- You must have federal student loans held by the Department of Education. Private loans do not qualify under this program.
- Your income must be no more than $125,000 per year for individuals or $250,000 per year for households.
How much student loan debt will be forgiven?
- Up to $10,000 of student loan debt will be forgiven for borrowers who meet the income criteria.
- Up to $20,000 of student loan debt will be forgiven for borrowers who received Pell Grants when they were in school, so long as they meet the income criteria.
- Debt forgiveness is limited to the total amount owed by borrowers, so not all borrowers will receive the full $10,000 or $20,000 of forgiveness they would otherwise qualify for.
How do I apply for forgiveness?
The U.S. Department of Education must determine if you meet the income requirement. In some cases, the Department of Education already has borrowers’ income information. In other cases, borrowers must submit their income to the Department of Education. An application to apply for forgiveness is available at studentaid.gov.
When will the forgiveness occur?
It’s unclear at this time when the forgiveness will be applied. The Department of Education is still working out the details. There may be court challenges to the forgiveness program and until all appeals conclude, the forgiveness isn’t guaranteed.
What other changes are being proposed?
- A new income-driven repayment program could reduce or eliminate undergraduate borrowers’ monthly payments by decreasing the percentage of discretionary income the borrowers must pay from 10% to 5%.
- The amount of non-discretionary income would also increase, further reducing the borrowers’ monthly payments.
- For borrowers with loan balances of $12,000 or less, any remaining balance would be forgiven after 10 years instead of 20 years.
- The proposed plan would also cover the borrowers’ unpaid monthly interest so their balances would not grow while they were making payments under the plan.
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