No. Only borrowers whose individual income is less than $125,000 or household income is less than $250,000 are eligible to receive debt cancellation from this announcement.

Any borrower who meets the income eligibility criteria and who also received a Pell Grant at any time to support their education is eligible for an additional $10,000 in debt cancellation.

Log in to www.StudentAid.gov, the main portal for borrowers’ federal student loans. Once logged in, you can view all of your federal loans, and can access information about and applications for different repayment plans or cancellation programs. You should be able to view if you received Pell Grants on your “dashboard”.

No. A borrower who received a Pell Grant at any time in any amount is eligible for a total of $20,000 of cancellation, as long as their current income is below the $125,000 maximum for an individual or $250,000 maximum for a married borrower, regardless of when they received the Grant and regardless of whether the borrower was still Pell-eligible when they took out the loans that could be cancelled.

All borrowers who received a Pell Grant are eligible. However, typically Pell Grants are only awarded to undergraduate students. Many graduate students or graduate loan borrowers may have previously received a Pell Grant during their undergraduate studies, and would thus be eligible for an additional $10,000 of cancellation. 

No, all borrowers applying for cancellation must meet the income threshold to be eligible for cancellation.

The Department will be looking at annual federal income from either the 2020 or 2021 tax year. In other words, if in either 2021 or 2020 your income was below the income caps that have been described, you would be eligible for relief. Any source of income that is taxable and would be included in a borrower’s Adjusted Gross Income counts towards these caps. According to the IRS, gross income includes your wages, dividends, capital gains, business income, retirement distributions as well as other income. If, once the cancellation application is released, a different standard is provided, this FAQ will be revised.

The income threshold does not depend on household size. 

Only income will be considered under the Department of Education’s eligibility process. The income caps for cancellation are individual incomes of $125,000 and household income of $250,000.

If you are a dependent, your parents’ income will be considered for your eligibility for cancellation.  

No, you just need to meet the income threshold to be eligible for cancellation. 

Yes, as long as you meet the income eligibility requirements and your loans were disbursed before June 2022. 

The following types of federal student loans with an outstanding balance as of June 30, 2022, are eligible for relief:

• William D. Ford Federal Direct Loan (Direct Loan) Program loans
  
  • Subsidized loans
  • Unsubsidized loans
  • Parent PLUS loans
  • Graduate PLUS loans
  • Consolidation loans, as long as all of the underlying loans that were consolidated were first disbursed on or before June 30, 2022*
• Federal Family Education Loan (FFEL) Program loans held by ED or in default at a guaranty agency
• Federal Perkins Loan Program loans held by ED
• Defaulted loans (includes ED-held or commercially serviced Subsidized Stafford, Unsubsidized Stafford, parent PLUS, and graduate PLUS; and Perkins loans held by ED)

In short, if your loans benefited from the pause on payments since March 2020, they are likely covered by this announcement.

*Commercially-held FFELP loans and Perkins loans held by institutions are no longer able to be consolidated to access student debt cancellation. If one of these loans was consolidated prior to September 29, 2022, they are eligible for student debt cancellation.

All loans disbursed through June 30, 2022, are eligible for forgiveness.

Commercially-held FFELP loans and Perkins loans held by institutions are no longer able to be consolidated to access student debt cancellation. If one of these loans was consolidated prior to September 29, 2022, they are eligible for student debt cancellation.

No. This announcement does not apply to private student loans, including private student loans that were used to refinance a federal student loan.

Yes, defaulted loans are eligible for debt relief. If you have a remaining balance on your defaulted loan(s) after relief is applied, you will be eligible to take advantage of the Fresh Start Initiative.

Yes, all loans disbursed through June 30, 2022 are eligible for forgiveness. 

Typically payments are applied to outstanding interest first, and then to principal. We anticipate that this is how cancellation will be applied. We will update as more information becomes available. 

For borrowers with multiple loans, the Department of Education has announced they will apply the relief in the following order:

• Defaulted ED-held loans
• Defaulted commercial FFEL Program loans
• Non-defaulted Direct Loan Program loans and FFEL Program loans held by ED
• Perkins Loans held by ED

If you have multiple loans in a program type (e.g., multiple Direct Loan Program loans), the Department will apply the relief in the following order:

• Apply relief to loans with the highest statutory interest rate.
• If interest rates are the same, apply to unsubsidized loans prior to subsidized loans.
• If interest rate and subsidy status are the same, apply to the most recent loan.
• If interest rate, subsidy status, and disbursement date are the same, apply to the loan with the lowest combined principal and interest balance.

The Department of Education will apply cancellation as described in the answer above, even if borrowers request otherwise.

Through 2025, there is no federal tax liability for cancelled student loan debt. Whether cancelled student loan debt is taxed as income at the state level will vary state by state. You should consult a tax expert if you have questions about taxes in your state. 

Yes. You can call your servicer and request a refund for those payments, even if you have paid off the loan, or you will automatically receive a refund of your payments during the payment pause if:

• you successfully apply for and receive debt relief under the Administration’s debt relief plan, AND
• your voluntary payments during the payment pause brought your balance below the maximum debt relief amount you’re eligible to receive but did not pay off your loan in full.

For example, if you’re a borrower eligible for $10,000 in relief; had a balance of $10,500 prior to March 13, 2020; and made $1,000 in payments since then—bringing your balance to $9,500 at the time of discharge—we’ll discharge your $9,500 balance, and you’ll receive a $500 refund.

Other borrowers can still receive refunds on voluntary payments made after March 13, 2020 by contacting their servicer. It’s important to note that these refunded payments will increase your loan balance and your monthly payments. If you expect to have a balance after discharge is applied and wish to request a refund, you can do so by contacting your servicer until Dec. 31, 2023. Borrowers who expect to receive $10,000 or $20,000 in cancellation should consider requesting payments you have made since March 2020 up to those amounts, and should consult a financial counselor if they have additional questions.

If you consolidated your loan after March 13, 2020, refunds aren’t available for any voluntary payments made prior to the consolidation.

Refund requests can only be made by you and refunded to you, even if someone else made a payment on your loan (such as a student loan refinancing company).

It is not yet known how the U.S. Department of Education plans to report this cancellation to the credit bureaus. 

You can identify your loan types by logging on to StudentAid.gov and selecting “My Aid” in the dropdown menu under your name (if you do not have an FSA ID, click “Create Account”). In the “Loan Breakdown” section, you’ll see a list of each loan you received. You’ll also see loans you paid off or consolidated into a new loan. If you expand “View Loans” and select the “View Loan Details” arrow next to a loan, you’ll see the more detailed name for that loan.

Direct Loans begin with the word “Direct.” Federal Family Education Loan Program loans begin with “FFEL” or “Stafford.” Perkins Loans include the word “Perkins” in the name. If the name of your servicer starts with “Dept. of Ed” or “Default Management Collection System,” your FFEL or Perkins loan is federally managed (i.e., held by ED).

Most borrowers will have to apply using the Department of Education’s online application. Some borrowers, such as those who filled out an IDR or FAFSA application using either 2020 or 2021 tax year information should receive cancellation automatically, without an application. The application was not released at the same time as the announcement but is expected in early October.

It only requires the documentation in the application for cancellation to establish your income eligibility for the initial $10,000 in cancellation. Most borrowers will have to apply using the Department of Education’s online application. You do not need to document that you received a Pell Grant.

The Department is in the process of creating a simple online form for borrowers to complete. Paper forms will also be available in English and Spanish. Details will be available soon on https://studentaid.gov/debt-relief-announcement/.

The Department of Education plans to release an online application by early October, and will release a paper version of the application some time after that. To be notified when the process has officially opened, borrowers can sign up at the Department of Education subscription page.

Eligible borrowers do not need to take additional steps. (See What types of loans are eligible?)

Commercially-held FFELP loans and Perkins loans held by institutions are no longer able to be consolidated to access student debt cancellation. If one of these loans was consolidated prior to September 29, 2022, they are eligible for student debt cancellation.

You will have until Dec. 31, 2023, to submit your application for student loan debt relief.

The Department of Education plans to release an online application by early October, and will release a paper version of the application some time after that.

For most borrowers, you will only receive debt relief if you submit an application. Some borrowers, such as those who filled out an IDR or FAFSA application using either 2020 or 2021 tax year information should receive cancellation automatically, without an application. If you would like to opt out of debt relief for any reason, including because you are concerned about a state tax liability, you will be given an opportunity to opt out.

Eligible borrowers do not need to consolidate. 

All loans eligible for the student loan pause are also eligible for relief, including loans held by ED and guaranty agencies. (See What types of loans are eligible?)

Commercially-held FFELP loans and Perkins loans held by institutions are no longer able to be consolidated to access student debt cancellation. If one of these loans was consolidated prior to September 29, 2022, they are eligible for student debt cancellation.

The payment pause has been extended to December 31, 2022. You should receive a monthly statement at least 21 days before your next payment is due.

This is a separate announcement from the limited PSLF Waiver, and will require different actions for borrowers. Importantly, for borrowers who continue to have student loans after this cancellation, the PSLF Waiver could result in the cancellation of the rest. For more information on the limited PSLF waiver, visit www.Forgivemystudentdebt.org. The PSLF Waiver will expire on October 31, 2022.

This is a separate announcement from the IDR Account Adjustment, and will require different actions for borrowers. Importantly, for borrowers who continue to have student loans after this cancellation, the IDR Account Adjustment could result in the cancellation of the rest. Importantly, borrowers with commercially-held FFEL loans will need to consolidate in order to take advantage of the IDR Account Adjustment. For more information on the IDR Account Adjustment, visit https://studentaid.gov/announcements-events/idr-account-adjustment.

In his announcement about debt cancellation, President Biden announced a new affordable repayment plan. That plan is not currently available, and its details are not finalized. These FAQs will be updated as soon as more information is available.

For information on cancellation from the Department of Education, visit https://studentaid.gov/debt-relief-announcement/.

The U.S. Department of Education’s website, www.StudentAid.gov, is always the main portal for borrowers’ federal student loans. Once logged in, you can view all of their federal loans, and can access information about and applications for different repayment plans or cancellation programs.

You can also visit https://studentaid.gov/debt-relief-announcement/ for more detailed information on the cancellation announcement.

For information about Public Service Loan Forgiveness, borrowers can visit www.ForgiveMyStudentDebt.org, which contains an explanation about the PSLF program and short-term changes, as well as short tutorial videos to guide borrowers through the steps they need to take by October 31, 2022.

Many states have Student Loan Ombudspersons, a state employee who can help residents with issues related to their student loans and student loan servicers. You can find a list of states with ombudspersons and their contact information here: https://protectborrowers.org/state-based-student-loan-ombudsmen/

There are limited legal resources to assist student loan borrowers, but some options do exist. A list of legal resources can be found here:

https://www.studentloanborrowerassistance.org/resources/referral-resource/legal-resources/