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Moving Forward: Student Debt Relief


The United States Department of Education currently offers federal student debt relief. The program offers eligible borrowers full or partial loan release of up to $20,000 for Federal Pell Grant recipients and up to $10,000 for non-Pell Grant recipients. Pell grants are available to low-income students based on their FAFSA.

Applications can be completed at studentaid.gov/debt-relief. The application takes about five minutes to complete. This is one-time debt relief. Applications opened earlier in October and will close on December 31, 2023. You do not need to provide any documents when applying, but the Department of Education may contact you for more information.

Not everyone is eligible for student loan forgiveness. First, there is an income limit. A person must have earned less than $125,000 in 2021 or 2022, from your IRS Form 1040. For families, the maximum income limit is $250,000 in 2021 or 2020.

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Private loans (from financial institutions, not the federal government) are not eligible for debt relief.

Debt relief only applies to loan balances you had before June 30, 2022. This includes Direct Loans (William D. Ford), FFEL Loans (Federal Family Education Loans), Perkins Loans, and Parent or Graduate PLUS Loans. Loans may or may not be subsidized by the government.

Any new loans disbursed (when loan funds have been received) on or after July 1, 2022 are not eligible for debt relief.

Federal loans in default (overdue) are also eligible.

Consolidation loans are a bit more complicated. This means that several loans have been combined so that a person only has to make one monthly payment. Federal student loan consolidation combines multiple federal loans into one federal loan through the Department of Education. These loans are eligible for the debt relief program.

Private lenders offer private student loan consolidation, also known as student loan refinancing. It’s a good idea to bundle private loans into one of these programs to lower interest rates and move to one monthly payment. These loans are NOT eligible for the debt relief program.

Private loans cannot be transferred to the federal government, but federal and private loans can be consolidated with a private lender. If you did this, you lost the opportunity to get debt relief on the federal loan. The Department of Education is still negotiating with private lenders to see if this can be changed, so people who have this type of consolidated loan should be careful that this is resolved.

Another complication is that there was a pause in payments during the COVID pandemic. From March 13, 2020 to December 31, 2022, borrowers did not have to make student loan repayments. If you made payments on your federal student loans during this time, the government will refund what you paid and forgive your loan up to the maximum amount of debt relief.

StudentAid.gov can provide assistance in completing the online form or answering questions related to a borrower’s specific situation. Contact the agency at 1-833-932-3439.

The Department of Education has issued several warnings about scams from companies offering to help you manage your loans or application for a fee. You NEVER have to pay for aid with your federal student aid. As with all scams, you would be asked for personal information and passwords. DON’T! If the government tries to contact a borrower, it will send an email from [email protected], [email protected]Where [email protected].