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Student Loan Forgiveness: Who's Eligible, and How Can You Apply?

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President Joe Biden announces student loan relief on Aug. 24, 2022, in the Roosevelt Room of the White House in Washington, DC. Biden announced that most US university graduates still trying to pay off student loans will get $10,000 of relief to address a decades-old headache of massive educational debt across the country. (Olivier Douliery/AFP via Getty Images)

President Joe Biden said Wednesday that many Americans can have up to $10,000 in federal student loan debt forgiven. That amount increases to $20,000 if they went to college on Pell grants, which are federal grants reserved for undergraduates with the most significant financial need.

Keep reading for what we know so far about the student loan forgiveness plan, or jump straight to:

Do I qualify for student loan forgiveness?

To be eligible for this student loan forgiveness plan, the White House says that your annual income must have fallen below $125,000 for individuals.

That annual income threshold rises to $250,000 for married couples, or the heads of households.

People who borrowed through most federal student loan programs are eligible. Those who have private loans issued by banks or schools will not qualify.

How much student loan forgiveness could I receive, if I'm eligible?

If you meet the income requirements above, and you were also the recipient of a Pell grant in college, the White House says you'll be eligible for up to $20,000 in debt cancellation.

If you meet the income threshold but you didn't receive a Pell grant in college, you'll qualify for up to $10,000 in debt cancellation.

The Washington Post reports that graduate student loans are eligible for student loan forgiveness, up to $10,000, but they're not eligible for the extra $10,000 offered to recipients of a Pell grant.

How do I apply for student loan forgiveness?

Applications for the student loan forgiveness plan haven't actually opened yet, so you're not missing anything.

The White House says that if the Department of Education already has your income data, your application for student loan forgiveness will happen automatically. If the Department of Education doesn't have your income data, or you're unsure whether they do or not, then you'll do an application yourself.

How will you apply, and when? The White House says it'll be launching a "simple" application process online "in the coming weeks," and that the application "will be available before the pause on federal student loan repayments ends" on December 31.

Keep an eye on the federal student aid website for more details in the coming weeks. You should also sign up for notifications from the U.S. Department of Education to find out when the application process has been opened up.

In the meantime, get more details about the student loan forgiveness plan with the White House's fact sheet.

Will the student loan payment freeze be extended?

Biden’s tweet said the student loan payment freeze will be extended one last time, until December 31. The student loan freeze started in 2020 as a way to help people struggling financially during the COVID-19 pandemic and it’s been extended several times since. The payment freeze was previously set to expire on August 31.

You don't need to do anything to extend your student loan pause through the end of the year. The extension will happen automatically.

Interest rates will remain at 0% until repayments start. Under an earlier extension announced in April, people who were behind on payments before the pandemic will automatically be put in good standing.

How many people will this student loan forgiveness plan help?

About 43 million Americans have federal student debt, and a third of those owe less than $10,000. Half owe less than $20,000.

The total amount of federal student debt is more than $1.6 trillion. Nearly one third of all American students take out loans to pay for college, with an average balance of $37,667, according to federal data.

What if I've already paid off my student loans? Will I see relief?

The debt forgiveness is expected to apply only to those currently holding student debt.

But if you’ve voluntarily made payments since March 2020, when payments were paused, you can request a refund for those payments, according to the Office of Federal Student Aid. Contact your loan servicer to request a refund.

Will student loan forgiveness definitely happen?

Critics believe the White House will face lawsuits over the plan, because Congress has never given the president the explicit authority to cancel debt.

We don’t know yet how that might affect the timetable for student loan forgiveness.

What if I can't afford to pay my student loans even with loan forgiveness?

Once payments resume, borrowers who can’t pay risk delinquency and eventually default.

Once a loan hasn’t been paid for 90 days or more, it’s labeled delinquent and will be reported to national credit reporting agencies, which could hurt your credit rating.

After 270 days, the loan will be considered in default. Consequences vary depending on the type of loan, but can include losing eligibility for additional federal student aid.

If you’re struggling to pay, check whether you qualify for an income-driven repayment plan. Find out more about income-driven repayment plans.

The plan Biden announced Wednesday also includes a provision that allows people with undergraduate loans to cap repayment at 5% of their monthly income.

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What's the Public Service Loan Forgiveness program?

If you're employed by a nonprofit organization, the military, the federal government or a state, tribal, or local government, you could also be eligible to have all your student loans forgiven through the Public Service Loan Forgiveness program.

Certain eligibility criteria in the PSLF program have been temporarily waived, but those changes expire on October 31.

Read more about applying for the Public Service Loan Forgiveness program.

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This story includes reporting from Cora Lewis and Adriana Morga of The Associated Press, with contributions from Seung Min Kim, Michael Balsamo, Chris Megerian and Zeke Miller. KQED's Juan Carlos Lara and Carly Severn contributed to this story.

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