Student loan borrowers making less than $125,000 per year will soon get relief.
If you owe money on student loans, as much as $20,000 of that debt could soon be canceled if you meet certain income criteria. The Biden administration is also extending the pause on repaying student loans until January 2023.
While some borrowers may automatically see their debt forgiven by the Department of Education without taking any additional steps, most will need to apply for forgiveness.
Under Biden’s plan, the Department of Education will cancel up to $10,000 in federal student loan debt for individual borrowers who make below $125,000 per year or less than $250,000 for married borrowers or those who are heads of households.
You may also be eligible for an additional $10,000 in relief if you received federal Pell grants while enrolled in college.
You may need to fill out an application for student loan debt forgiveness
Whether you need to apply for student loan debt forgiveness depends on if the Department of Education already has your income information — this group of borrowers mostly includes those who are enrolled in income-driven repayment (IDR) plans.
If the department does have your income data, it will automatically cancel your eligible debt. You won’t need to do anything further.
If the department doesn’t have your income details, you must complete a new application from the Biden administration to supply the information the department needs to cancel your debt.