any or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.
any or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money. President Joe Biden announced a broad vision for student loan debt repayment and debt cancellation on August 24, with details — and some backtracking — trickling out in the months that have followed. Through executive order, federal student loan borrowers who meet income requirements will see up to $10,000 in debt canceled. If the borrower received a Pell Grant to attend school, the forgiven amount rises to $20,000. As of Nov. 3, nearly 26 million have already applied, according to the White House, and 16 million requests have been approved. Relief had been expected to begin as soon as Oct. 23, but intensifying legal challenges across the country mean borrowers must continue to wait through appeals in hopes the whole plan is not derailed. The Department of Education notified approved applicants on Nov. 19, but said debt relief was on hold while it works through the lawsuits. MORE» Education department halts new student loan relief applications, for now About 43 million Americans have federal student loan debt. The White House says the plan cancels the full remaining balance for 20 million of them. Income requirements block relief for high-income households: Individuals must have earned less than $125,000 in the previous tax year, while married couples filing jointly must earn less than $250,000. The details Who qualifies for debt cancellation?
On Nov. 22, the Biden administration also announced an eighth extension of payment forbearance. Borrowers with federal student loans have not been required to make payments since March 2020 and may not have to make another until as late as August 2023, depending on whether lawsuits are resolved in some way before then.
The education department has also rolled out a long list of fixes to existing loan forgiveness programs, broadening the range of payments that count toward forgiveness.
Lastly, the Education Department proposed a new income-driven repayment plan that would reduce future payments and limit the growth of balances if payments are current.
What we know and don’t know so far:
For some FFELP borrowers, the rules have changed
The process of cancellation has not yet begun in earnest, but the White House has already backtracked on guidance for borrowers who have old, commercially held Perkins loans and Federal Family Education Loans guaranteed by the government. Without warning, the language that seemed to qualify those borrowers for the cancellation program was changed Sept. 29.
