Student Loan Forgiveness

Student Debt Relief Plan

On August 25th, 2022 President Biden announced the Student Debt Relief Plan. The plan includes forgiving federal student debt for those that make under $125,000 per year ($250,000 for couples). Students who received a Pell grant can get up to $20,000 forgiven and those who didn’t can get up to $10,000. It hasn’t been announced how and when this forgiveness, along with several other major proposed changes, will be fully rolled out to borrowers.

Income-Driven Repayment Plan Changes

Not only will this plan forgive student debt, it also will make it easier to pay off any remaining debt. Changes to income-driven repayment plans will include capping the percent of discretionary income the borrower must pay at 5% (as opposed to the current 10%) on undergraduate loans. It also raises the amount of income considered non-discretionary. This means a smaller percent of a smaller amount of income will be used to calculate the payments. It also makes it so that no workers earning 225% under the federal poverty level (those making around $15 an hour) will be required to make monthly payments.

Along with smaller payments, it will make forgiveness easier for those on income-driven repayment plans. For those who make their payments consistently and have a balance of $12,000 or less, their debts could now be fully forgiven after 10 years instead of 20. And if a borrower on an income-driven repayment plan makes their monthly payments (or if their monthly payment is calculated to be $0) the government will cover the interest. That means their student loan debt will not continue to grow, making it easier to pay off the owed amount.

PSLF Eligibility Changes

The plan waives some of the eligibility requirements for the Public Service Loan Forgiveness (PSLF) program. If you have worked in public service for 10 years or more (even if not consecutively), you may be eligible to have all your student debt canceled. That means borrowers who have worked for non-profits, the military, and federal, state, Tribal, or local governments may be eligible, even if they weren’t previously, but borrowers must apply by October 31, 2022. For more information, go to

Payment Pause

The pause on student loan payments has been extended a final time to December 31, 2022.

* Click here for an easy to use calculator to see what student loan forgiveness would mean for you and a list of frequently asked questions.

NOTICE: some details of the program may have changed since this post was published

** Photo Credit Eric Fellegy

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