By the Biden-Harris Administration, a three-part student debt relief plan has been put in place and will be available until Dec. 31, 2023. However, on Friday, a court order temporarily blocked distribution of debt relief funds. Applications for the program are still open and being reviewed by the administration, but it is currently unknown when the court case will be resolved.
The first part of the three-part relief plan is the “final extension of the student loan repayment pause,” with this last pause being through Dec. 31, and payments resuming in January 2023.
The second part is “providing targeted debt relief to low- and middle-income families,” which you can apply for today. What this will do is discharge loans up to $20,000 for Federal Pell Grant recipients and up to $10,000 for those without the grant. Those who made less than $125,000 for an individual or less than $250,000 for families in 2021 or 2020 qualify for the relief. Check your incomes, and if they fit the specified requirements, you can apply for the Federal Student Loan Debt Relief. The application takes about five minutes and doesn’t require providing any documentation.
To specify, non-federal loans are not eligible for the relief, but the William D. Ford Federal Direct Loan (Direct Loan) Program loans; Federal Family Education Loan (FFEL) Program loans held by ED or in default at a guaranty agency; Federal Perkins Loan Program loans held by ED; and Defaulted loans (includes ED-held or commercially serviced Subsidized Stafford, Unsubsidized Stafford, parent PLUS, graduate PLUS and Perkins loans held by ED) all qualify. Additionally, the loan balances must have been made before June 30, 2022, to qualify; any made after are not eligible.
For the future, the third part of this plan is to “make the student loan system more manageable for current and future borrowers.” The Biden-Harris Administration is working on a rule that will help lower the monthly payments for lower- and middle-income borrowers.