Biden Administration Announces Student Loan Forgiveness for 43 Million Borrowers

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After months of speculation about the direction President Biden would take as the pause on student loan payments neared its expiration at the end of August, the administration has made the announcement that up to 43 million borrowers will qualify for some amount of loan forgiveness up to $20,000.

What’s in the plan?

President Biden’s student loan relief plan has three parts. First, the payment pause has now been extended (for the final time) through the end of this year. Second, for those who have federal loans and earn less than $125,000 if you are single and $250,000 if you file taxes jointly or are head of household, the plan will cancel up to $10,000 in federal student loan debt, and up to $20,000 for Pell Grant recipients. Only federal student loan debt is eligible, including PLUS loans and Parents PLUS loans. Most people will need to fill out paperwork in the coming months to have their loans forgiven. 

Finally, the new plan will reduce future monthly payments for many lower- and middle-income borrowers by ensuring they don’t have to pay more than 5 percent of their income. Borrowers who earn under 225 percent of the federal poverty level (roughly $15 an hour) will not have to make payments at all. The plan will also cover some borrowers’ unpaid monthly interest so balances don’t continue to grow. Those who have been paying their loans for 10 years and still owe under $12,000 will see their debt completely erased.

Student loan forgiveness FAQs

Beginning in 2023, lots of folks will resume making payments (many at a reduced rate). Our guide to managing and preparing for student loans can be a helpful refresher before payments restart. For frequently asked questions about the Biden administration’s loan forgiveness plan, we also put together this helpful Q&A—

  • Who qualifies for debt forgiveness? 
    • Anyone with federal loans earning less than $125,000/yr or $250,000 if married and filing jointly
    • You do not need to complete your college degree in order to qualify 
    • If both borrower and parent receive student loans from the government, both the parent and student will be eligible for forgiveness. Their income and debt will not be counted together as one, therefore forgiveness is granted per each individual borrower. 
  • If I qualify, how much will be forgiven? 
    • Anyone who qualifies will receive up to $10,000 in debt forgiven
    • If you received a pell grant, your loan forgiveness will go up to $20,000
  • What is a Pell grant? 
    • Pell grants are federal grants awarded to low income students applying for their undergraduate school degree or post-baccalaureate. These grants do not need to be repaid and were created to help low income students get into college.
  • What type of loans are included in this forgiveness plan?
    • Federal student loans, including Pell Grants, government owned FEEL loans (Federal Family Education Loan Program), Parent PLUS, and Grad PLUS loans. Private student loans are not eligible, they must be federal. 
  • What do I need to do to qualify? 
    • You may receive relief automatically if the federal government has your recent income data. If the federal government does not have your most recent income data, there will be a form to complete online in the next few weeks. 
  • When will student loan payments resume? 
    • According to President Biden, payments will resume January 1, 2023. 
  • What does the timeline look like for debt forgiveness to appear in my account? 
    • An online form will be sent by the department of education before 12/31/22. If you would like to access the debt forgiveness application as soon as it is released online you may subscribe to and you’ll receive an email notification. 
  • To determine whether my income qualifies me for forgiveness, which tax year will be used?
    •  Either 2020 or 2021, depending which one meets the income cap requirement.  
  • What if I’ve been continuing to make  student loan payments during the pandemic, can I get forgiveness on those payments? 
    • If you made any payments since the payment pause took effect on March 13, 2020, you may be eligible for a refund, but you must call your loan servicers to verify that you qualify and then request the refund. Refund payments could take weeks or months so make sure to call your loan servicer and ask about forgiveness asap. 
  • Will I be taxed for my loan forgiveness? 
    • The Biden administration has confirmed that the student loan forgiveness won’t be taxed at the federal level. Thirteen states, however, may treat this loan forgiveness as taxable income. The states are Arkansas, Hawaii, Idaho, Kentucky, Massachusetts, Minnesota, Mississippi, New York, Pennsylvania, South Carolina, Virginia, West Virginia, and Wisconsin. This is not certain yet, but you can find out more by contacting your local tax preparer. 
  • If I already paid my loans prior to March 2020, will I see a retroactive payment? 
    • No, this is a one time debt forgiveness. You will only receive retroactive payments if you made payments between March 2020 – June 23, 2022. If you qualify for loan forgiveness and made any payments after June 23, 2022 which would have been canceled otherwise, you may qualify for a refund. 
  • What is PSLF (public service loan forgiveness)? 
    • The PSLF is a program created to end student debt for public service workers such as teachers, full time federal, state, tribe, or local government including the military and certain nonprofits who have made 120 payments. Previously, several restrictions prevented many borrowers from qualifying, but now some restrictions are temporarily waived. The waivers are set to expire on October 31, 2022 you must apply before then. You can find out if you qualify and apply here.

Mckenna Saady is a staff writer and digital content lead for ParentsTogether. Before working for nonprofits such as the Human Rights Campaign and United Way, Mckenna spent nearly a decade as a child care provider and Pre-K teacher. Originally from Richmond, VA, she now lives in Philadelphia and writes poetry, fiction, and children’s literature in her spare time.