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  • Lani Hansen

Biden-Harris student debt relief plan explained


On Aug. 24, 2022, the Biden-Harris Administration announced a Student Debt Relief Plan that includes one-time student loan debt relief targeted to low- and middle-income families. STUDENTAID.GOV

This plan includes loan forgiveness of up to $20,000. You’ll have until Dec. 31, 2023 to apply.

WASHINGTON – President Joe Biden, Vice President Kamal Harris and the U.S. Department of Education have announced a three-part plan to help working and middle-class federal student loan borrowers transition back to regular payment as pandemic-related support expires.

This plan includes loan forgiveness of up to $20,000. Many borrowers and families may be asking themselves “what do I have to do to claim this relief?” There will be more details announced in the coming weeks. To be notified when the process has opened, sign up at the You’ll have until Dec. 31, 2023 to apply.

1. Final extension of the student loan repayment pause

Due to the economic challenges created by the pandemic, the Biden-Harris Administration has extended the student loan repayment pause several times. Because of this, no one with a federally held loan has had to pay a single dollar in loan payments since Biden took office. To ensure a smooth transition to repayment and prevent unnecessary defaults, the Biden-Harris Administration will extend the pause a final time through Dec. 31 with payments resuming in January 2023.

Borrowers will not have to anything to extend the student loan pause as the extended pause will occur automatically.

2. Providing targeted debt relief to low- and middle-income families

To smooth the transition back to repayment and help borrowers at highest risk of delinquencies or default once payments resume, the Education Department will provide up to $20,000 in debt relief to Pell Grant recipients with loans held by the Education Department and up to $10,000 in debt relief to non-Pell Grant recipients. Borrowers are eligible for this relief if their individual income is less than $125,000 or $250,000 for households. Get details at

In addition, borrowers who are employed by nonprofits, the military, or federal, state, tribal, or local government may be eligible to have all of their student loans forgiven through the Public Service Loan Forgiveness program. This is because of time-limited changes that waive certain eligibility criteria in the PSLF program. For more information on eligibility and requirements, go to

How do I know if I am eligible for debt relief?

· To be eligible, your annual income must have fallen below $125,000 (for individuals) or $250,000 (for married couples or heads of households)

· If you received a Pell Grant in college and meet the income threshold, you will be eligible for up to $20,000 in debt relief.

· If you did not receive a Pell Grant in college and meet the income threshold, you will be eligible for up to $10,000 in debt relief.

What does the “up to” in “up to $20,000” or “up to $10,000” mean?

· Your relief is capped at the amount of your outstanding debt.

· For example: If you are eligible for $20,000 in debt relief, but have a balance of $15,000 remaining, you will only receive $15,000 in relief.

What do I need to do to receive debt relief?

· Nearly 8 million borrowers may be eligible to receive relief without applying – unless they choose to opt out – because relevant income data is already available to the Education Department.

· For borrowers whose income data the Education Department doesn’t have, the administration was expected to launch a simple application in October. Borrowers won’t need to upload any documentation or have an FSA ID to submit their application.

· Most borrowers who apply can expect relief within six weeks.

· It is encouraged that everyone who is eligible to file the application, but there are 8 million people for whom there are data and who will get the relief without applying unless they choose to opt out.

· Borrowers are advised to apply by mid-November to receive relief before the payment pause expires on Dec. 31.

· The Department of Education will continue to process applications as they are received, even after the pause expires on Dec. 31.

What is the Public Service Loan Forgiveness Program?

· The Public Service Loan Forgiveness program forgives the remaining balance on your federal student loans after 120 payments working full-time for federal, state, tribal, or local government; the military; or a qualifying non-profit.

· Temporary changes, ending on Oct. 31, provide flexibility that makes it easier than ever to receive forgiveness by allowing borrowers to receive credit for past periods of repayment that would otherwise not qualify for PSLF.

· Enrollments on or after Nov. 1 will not be eligible for this treatment. Visit to learn more and apply.

3. Make the student loan system more manageable for current and future borrowers.

Income-based repayment plans have long existed within the U.S. Department of Education. However, the Biden-Harris Administration is proposing a rule to create a new income-driven repayment plan that will substantially reduce future monthly payments for lower- and middle-income borrowers.

The rule would:

· Require borrowers to pay no more than 5% of their discretionary income monthly on undergraduate loans. This is down from the 10% available under the most recent income-driven repayment plan.

· Raise the amount of income that is considered non-discretionary income and therefore is protected from repayment, guaranteeing that no borrower earning under 225% of the federal poverty level – about the annual equivalent of a $15 minimum wage for a single borrower – will have to make a monthly payment.

· Forgive loan balances after 10 years of payments, instead of 20 years, for borrowers with loan balances of $12,000 or less.

· Cover the borrower’s unpaid monthly interest, so that unlike other existing income-driven repayment plans, no borrower’s loan balance will grow as long as they make their monthly payments – even when that monthly payment is $0 because their income is low.



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