Federal Student Loan Relief: Q&A

While student debt relief distribution remains on pause, many have asked, “what should I do?” Currently, applications are open, and if you believe you qualify, the application for one-time student loan relief is simple.

As we wait for legal contingencies to be determined, keep the following in mind.

How to apply and determine eligibility

While debt discharge is paused, applications are open. Individuals who made less than $125,000 in 2021 or 2020 or families that made less than $250,000 in 2021 or 2020 are eligible. Complete the short application, then you’ll receive a notification if more info is needed or if your application is approved. The only information needed to apply is your name, Social Security number, date of birth, phone number and email address.

How much relief is included, and which loans are eligible?

If you received a Federal Pell Grant in college and meet the income requirements, up to $20,000 relief may be available. Otherwise, up to $10,000 may be available. Both amounts apply only to loan balances you had before June 30, 2022.

Are there personal tax implications?

While some states will tax on the relief amount, at this time, Pennsylvania will not. Individuals will not be taxed at a federal level.

Are parents eligible to apply?

Yes, if a parent has an eligible loan such as a Parent PLUS loan, they should apply separately from their child.

Will I be reimbursed for past payments made during the payment pause?

If you made a payment between March 13, 2020 and Dec. 31, 2022 and your current loan balance is below the amount of debt relief you’ll receive, you should complete an application to receive a refund.

What’s the timeline?

While everything is subject to change due to pending litigation, keep several (tentative) key dates in mind:

  • November 14: For those eligible for automatic forgiveness (the Education Department will contact you if this is the case), the Education Department intends to automatically process relief on Nov. 14, so if you’d like to opt out, do so before then.
  • November 15: Apply before mid-Nov. to ensure loans are discharged before payments restart in 2023.
  • Mid-December: Many borrowers who applied in October could start to see their loan balances drop.
  • January 1, 2023: Federal student loan payments restart after being on pause since March 2020.
  • December 31, 2023: The student loan forgiveness application closes.

Where to find more information

Borrowers may have questions specific to their situation or about the process. Visit the Department of Education’s debt relief site HERE to learn more.

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