On August 24, 2022, the 46th Administration officially announced a final extension to student loan payments and forgiveness for federal student loan debt of up to $20,000. In the month since, more information has been provided to explain who qualifies and how to claim relief.
Student loan payments can be deferred until December 31, 2022. Payments will resume in January 2023. If you qualify for loan forgiveness, you could receive relief before 2023. Here are the answers to some of the most common questions about student loan forgiveness.
Am I eligible for student loan forgiveness? How much can I receive?
The U.S. Department of Education is providing debt cancellation of up to $20,000 for Pell Grant recipients with loans held by the Department of Education, and up to $10,000 in debt cancellation to non-Pell Grant recipients. Borrowers can check whether they have received a Pell Grant through the Student Aid website, under the page “My Aid” on the account dashboard.
The amount of relief you receive will be capped at the amount of outstanding debt due. If your debt is less than the amount of relief you are eligible for ($10,000 and $20,000 respectively), you will receive the exact amount you owe.
Which loans are eligible for forgiveness?
Image obtained through the www.FederalStudentAid.gov
To qualify, borrowers must have:
- had an individual income of less than $125,000 in 2020 or 2021
or
- had a joint/household income of less than $250,000 in 2020 or 2021
How do I apply for student loan forgiveness?
The U.S. Department of Education has the income data for nearly 8 million eligible borrowers. However, it is important to stay on top of your eligibility to make sure you don’t miss the application window. If you automatically qualify for debt relief, you will receive an email/text message confirming your eligibility. You do not have to take any further action.
If you do not receive such news, you may have to apply yourself. In early October, a simple online application to collect borrowers’ income data will become available. You can sign up to be notified through the Department of Education subscription page. After the application is completed, borrowers can expect relief within 4-6 weeks. To ensure you receive a confirmation email of your application, log in to your Student Aid account and make sure your most current email address is listed under your contact information.
Applicants are encouraged to file before November 15th to receive relief before the payment pause expires at the end of 2022. The Department of Education will continue to process applications as they are received after the expiration.
The deadline to apply for student loan debt forgiveness is over a year from now, on December 21, 2023. Though the application will initially be available online, those who apply in 2023 will have access to a paper version of the form.
How will I know when I receive debt relief?
Your loan servicer will notify you when and how the relief has been applied. If you still have a loan balance after debt relief, your remaining balance will be used to recalculate your monthly payments. This could potentially reduce your monthly payment amount.
I made voluntary payments during the pandemic. Am I eligible for a refund?
Yes. You will automatically receive a refund if:
- you apply for and receive debt relief under the Administration’s relief plan
- your voluntary payments during the payment pause brought your balance below the maximum debt relief amount you’re eligible to receive
Is there any other way to receive debt relief?
If you’ve worked in public service (federal, state, local, tribal government or nonprofit organization) for 10+ years, you may be eligible to cancel all your student debt. Check your eligibility and apply before October 31, 2022.
Who can help me with my student loans?
You may be contacted by a company or individual offering you help with your loan forgiveness or cancellation. You never have to pay for help with your federal student aid. All official emails about your student loans will be sent from noreply@studentaid.gov. Make sure you aren’t giving out your personal or account information to anyone else. For more information on how to avoid or deal with loan-related scams, keep an eye out for our upcoming blog post.
Lone Star Legal Aid (LSLA) is a 501(c)(3) nonprofit law firm focused on advocacy for low-income and underserved populations by providing free legal education, advice, and representation. LSLA serves millions of people at 125% of federal poverty guidelines, who live in 72 counties in the eastern and Gulf Coast regions of Texas, and 4 counties in Southwest Arkansas. LSLA focuses its resources on maintaining, enhancing, and protecting income and economic stability; preserving housing; improving outcomes for children; establishing and sustaining family safety, stability, health, and wellbeing; and assisting populations with special vulnerabilities, like those with disabilities, the aging, survivors of crime and disasters, the unemployed and underemployed, the unhoused, those with limited English language skills, and the LGBTQIA+ community. To learn more about Lone Star Legal Aid, visit our website at www.LoneStarLegal.org.
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