The Biden-Harris Administration has begun to roll out initiatives under their student debt relief plan. The plan aims to provide targeted debt relief to low- and middle-income families and make the student loan system more manageable for current and future borrowers. While One-Time Federal Student Loan Debt Relief, or student loan forgiveness, is one of the most notable initiatives, changes to the Public Service Loan Forgiveness Programs and Income-Driven Repayment Account Adjustment may also reduce your student loans.
Important dates and deadlines to apply to receive these benefits are approaching over the next few months, and this simple timeline makes it easy to stay on top of it all so you can fully benefit from the student debt relief plan! Get your calendar out, bestie.
Right Now
The student loan forgiveness application (also known as One-Time Federal Student Loan Debt Relief) is open right now! This program provides debt relief to those whose annual income falls below $125,000 for individuals and $250,000 for married couples. The amount of aid you are eligible to receive depends on if you received a Pell Grant, which is a federal grant awarded on the basis of financial need. Non-Pell Grant recipients are eligible for up to $10,000 in student loan debt relief and Pell Grant recipients are eligible for up to $20,000 in student loan debt relief.
Additionally, borrowers that have been employed by a U.S. federal, state, local, or tribal government or a not-for-profit organization for ten or more years may be eligible for the Public Service Loan Forgiveness program (PSFL). The PSFL Help Tool allows borrowers to check their eligibility, which was modified for COVID-19 relief measures that end on Dec. 31, 2022. As these relief measures end, it’s important to know that specific qualification standards will change from the standards of the Limited PSFL Waiver, so be aware if you apply. In November 2022, borrowers who have 20 to 25 years of payments through these changes will start receiving loan discharges. Borrowers who applied for PSLF prior to Oct. 31, 2022 and reach 10 years of payments due to the deferment and forbearance changes will also receive loan discharges.
Nov. 15, 2022
The U.S. Department of Education recommends that you apply for One-Time Federal Student Loan Debt Relief by Nov. 15 to account for processing time and the resuming of student loan repayments on Jan. 1, 2023. It may take between four to six weeks for applications to be processed and for debt relief to be available in applicants’ accounts. (Oh, and BTW, applying only takes a couple of minutes!)
Jan. 1, 2023
On the first day of 2023, student loan repayments will resume after several extended pauses to account for financial hardships due to the COVID-19 pandemic. Though One-Time Federal Student Loan Debt Relief may reduce your loans, it’s important to be prepared by communicating with your student loan servicer and understanding different strategies for dealing with loan repayment. Alex Ricci, who works at the non-profit organization Education Finance Council, recommended to US News to start setting aside a portion of your paycheck so you have a safety net when repayment starts.
May 1, 2023
The new Income-Driven Repayment (IDR) Account Adjustment begins in November 2022, but borrowers will likely begin to see the effects between May through July 2023. IDR are loan repayment plans and adjustments that are tied to a borrower’s income and family size. IDR Account Adjustment is an initiative led by the Department of Education that will credit borrowers with time towards 20-year or 25-year student loan forgiveness terms under income-driven repayment (IDR) plans, even if they’ve been repaying their student loans under a different plan.The U.S. Department of Education stated that over 3.6 million borrowers will receive at least three years of repayment credit.
Luckily, if you already have federal student loans, no additional action is necessary to benefit from this initiative — just sit back and relax! However, if you have commercially-held loans or were enrolled in the Federal Family Education Loan program (FFEL), you may require direct loan consolidation to benefit from this initiative. FFEL borrowers that apply for loan consolidation by May 1, 2023 may also receive PSLF credit.
Dec. 31, 2023
Though it’s ideal to apply for student loan forgiveness before Nov. 15th, 2022, Dec. 31, 2023 is the last day that the One-Time Federal Student Loan Debt Relief application will be open.
Many of these quick applications take under 30 minutes to fill out and may result in thousands of dollars in debt relief for you. So, do yourself a favor and set up that calendar notification so you won’t miss out on the benefits of the student debt relief plan! Your future self will thank you for it.