Ron Lieber & Tara Bernard, NY Times


President Biden’s move means the student loan balances of millions of people could fall by as much as $20,000. This F.A.Q. explains how it will work. President Biden’s move means the student loan balances of millions of people could fall by as much as $20,000. This F.A.Q. explains how it will work.

President Biden announced on Wednesday that the federal government would cancel up to $20,000 worth of federal student loans for millions of people. But not everyone with debt will qualify.

The action includes rules that will maintain the balances of debtors who currently have high incomes. Those who do qualify will need to navigate the balky federal loan servicing system and keep a close eye on their accounts and credit reports for any mistakes.

It also extends the pause on monthly student loan payments, which means that borrowers won’t have to resume payments until at least January and provides details on a new proposal to create a more affordable income-driven repayment plan.

What follows are questions you may have about the cancellation program with answers that have come from the White House, the Department of Education and student loan servicers.

We will update this article in the coming days and weeks as more details become available.

Who qualifies for loan cancellation?

Individuals who are single and earn under $125,000 will qualify for the $10,000 in debt cancellation. If you’re married and file your taxes jointly or are a head of household, you qualify if your income is under $250,000.

Eligibility will be based on your adjusted gross income. Income figures from either 2020 or 2021 can render you eligible, but 2022 income will not.

If you received a Pell Grant and meet these income requirements, you could qualify for an extra $10,000 in cancellation.

Loans obtained after June 30 are not eligible for relief.

Which types of debt qualify?

Only federal student loan debt is eligible. This includes PLUS loans, whether parents or graduate students took them out.

Private loans are not eligible. Neither are many so-called F.F.E.L. loans, which stand for Federal Family Education Loan. If your F.F.E.L. loan was not eligible for the payment pause that began in 2020, it will not be eligible for the new cancellation.


I didn’t finish my degree. Does that disqualify me?


Start by making sure that your loan servicer knows how to find you, so that you’ll be able to receive any guidance it provides and follow any instructions that it issues. Check that your postal address, your email address and your mobile phone number are listed accurately.

If you don’t know who your servicer is, consult the Department of Education’s “Who is my loan servicer?” web page for instructions.

It depends. If you’re already enrolled in some kind of income-driven repayment plan and have submitted your most recent tax return to certify that income, your servicer and the Education Department know how much you earn and you should not need to do anything else. Still, keep an eye out for guidance from your servicer.

The department said Wednesday that close to eight million borrowers “may” be eligible to get this automatic relief.

For everyone else, it will make some kind of application available by the end of the year. “The Department of Education will work quickly and efficiently to set up a simple application process for borrowers to claim relief,” according to a White House statement.

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