When President Biden announced last week that he would forgive some federally held student-loan debt, the issue of student loan debt was thrust back into the news.
As part of the Student Debt Relief Plan that was announced on August 25, the U.S. Department of Education will provide up to $20,000 in student loan cancellation to Pell recipients and up to $10,000 to non-Pell recipients. Borrowers with individual incomes of less than $125,000 or household incomes of less than $250,000 are eligible for this relief. Plan information and details can be found here.
It was not the first time that recipients of student loans have been given the opportunity to get relief from loans. The Public Service Loan Forgiveness (PSLF) Program, which was established under the College Cost Reduction and Access Act of 2007, has permitted direct loan borrowers who make 120 qualifying monthly payments under a qualifying repayment plan, while working full-time for a qualifying employer, to have the remainder of their balance forgiven.
On October 6, 2021, the Department of Education announced temporary changes to the program under the Limited PSLF Waiver. The changes allowed student loan borrowers to get credit for payments that previously didn’t qualify under the original program. Borrowers can now get credit for past payments even if they
• had or have a Federal Family Education Program (FFEL) loan or a Perkins loan;
• didn’t make the payment on time;
• didn’t pay the full amount due; or
• weren’t on the right repayment plan.
The window for applying for benefits under the Limited PSLF Wavier is fast closing and is due to expire on October 31, 2022.
To find out if you’re eligible, the Department of Education has created a resource website. A website created by the White House also features a 3-step eligibility tool and a one-page explainer document.