When will student loans be forgiven?

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Federal student loans are a common way to finance a college education. However, as college costs continue to increase, student debt becomes more and more of a national problem. Programs like federal family education loans and the student loan forgiveness program are meant to help borrowers afford college and decrease their debts.

Students who took out federal student loans may be eligible for up to $20,000 in debt relief. The loan forgiveness program can help borrowers recover from their remaining federal student loan debt by canceling or forgiving a large portion of the remaining debt.

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Federal student loans will be forgiven as soon as the borrower’s student loan forgiveness application is processed. Applications can be sent in anytime between now and December 31, 2023. Federal student loan borrowers will have a significant portion of their debt forgiven by December 31, 2023, or sooner if they meet all of the qualifying criteria.

One important rule to remember when applying for student loan forgiveness is that the program only forgives loans taken out before June 30, 2022. Loans taken out after this date are not eligible for forgiveness.

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For more resources on student debt relief and federal student aid, make a free profile with Bold.org. Student loan forgiveness can be confusing, but with the help of our ultimate guide on student loan forgiveness, the program should be easier to understand.

Federal student aid is a common way to pay for college for thousands of students. Those who are looking to increase their college budgets should also consider scholarships as a way to supplement any federal student loans they may already have.

Unlike student loans, scholarships do not need to be repaid at all. There’s a scholarship for every student out there, and there’s no limit to how many scholarships you can apply for. For more information, read this guide on how student loans and scholarships are different.

In fact, many scholarships can even be used to repay your federal student loan debt. Start applying for scholarships today. Check out the list of scholarships for paying off student loan debt or browse all the scholarships available on Bold.org.

Important dates to know:

  • June 30, 2022

Only loans taken out before this date are eligible to receive forgiveness. Loans taken out after this date will not be eligible for debt relief programs.

  • December 31, 2022

This is when the student loan pause will end. Currently, federal loan monthly payments and interest are suspended while borrowers apply for debt relief. Borrowers will need to resume federal student loan repayments if they still have debt after this date.

  • December 31, 2023

This is the deadline for submitting a student loan forgiveness application. Note that this is one year after the payment pause— loan forgiveness applications will be accepted until the end of 2023.

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How do you know if your student loan is forgiven?

Federal student loan debt holders will need to apply first for forgiveness through the federal loan forgiveness program. After the application is sent in, borrowers should receive an email confirmation. It will take some time for your application to be processed and reviewed.

When a decision is reached regarding your application, you will be notified of how relief will be applied to your loans and how much will be forgiven. You will know if your student loans are forgiven or not by checking if your loan servicers have applied relief to your loan statements.

Checking your accounts with your loan service providers will let you know if your loan is forgiven or not. Federal student loan borrowers should receive a notification for each loan service provider they have an account with. Make sure all of your service providers have up-to-date contact information so that you don’t miss important updates regarding your loan forgiveness.

Your loan service providers will also be the ones to inform you if your debts have been paid in full, or if you will continue to make payments on your loan balances. Those who have qualified for and received partial forgiveness will likely have a reduced monthly payment since some of their debt has been forgiven.

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The current payment pause will last until December 31, 2022. During this period, the interest rate for all federally eligible loans will be set to 0%, meaning that debts will not increase while the pause is in effect. The payment pause means that borrowers will not need to make payments on their student loan debt until after December 31, 2022.

After applying for and receiving debt relief, borrowers who still have some debt remaining will need to continue making monthly payments after December 31, 2022. Your regular interest rate may apply, or the interest rate may change after receiving debt relief.

In summary, after applying for student loan forgiveness, your loan service provider will tell you whether you will receive debt relief and how much you will get. Loan service providers will also be able to update you on your new monthly payment amounts, which will begin after the payment pause ends.

Who qualifies for Biden loan forgiveness?

The student loan forgiveness program is meant to be as accessible as possible in order to help reduce the growing federal student loan debt. As a result, many federal student loan borrowers will be able to receive loan forgiveness. To learn more about the student loan debt crisis, visit Bold.org’s student loan research report.

First, you may only apply for student loan forgiveness if your loans were taken out before June 30, 2022. Borrowers who took out loans after this date cannot apply for forgiveness.

Secondly, there are some income restrictions for potential debt relief candidates. Those with federal student loans eligible for loan forgiveness who are single should have an income of under $125,000. A married individual who filed separately from their spouse and is seeking debt relief should have an income of under $125,000 as well.

For married couples who file their taxes jointly, their annual income should be below $250,000. A head of the household and widow or widower should also make below $250,000 to be considered.

Most importantly, the loan you hold needs to be eligible for loan forgiveness in order to apply. Loans that are not covered in the loan forgiveness program will not be forgiven.

This type of targeted debt relief is meant to help lower-income borrowers, who were likely impacted the most during COVID-19 and who struggle the most to pay their loan payments on time.

Eligible loans include:

  • William D. Ford Federal Direct Loan, or Direct loan.
  • Federal Family Education Loans, or FFEL
  • Federal Perkins Loans
  • Unsubsidized and Subsidized Loans
  • Parent PLUS Loans
  • Graduate PLUS Loans

Private loans or any loans that do not come from federal lenders will not be eligible for loan forgiveness.

Federal student loan borrowers can check if their loan is eligible by logging on to StudentAid.gov and selecting the ‘My Aid’ option. This page should be able to show you which federal loans are under your name. If the federal loans listed on your ‘My Aid’ page are one of the loans from the above list, your loan should be eligible for aid.

Can I apply for student loan forgiveness now?

Yes, anyone with qualifying federal student loans can apply for forgiveness any time between now and December 31, 2023. As long as borrowers send in their application before this date, they should be able to get debt relief (provided they qualify for aid).

The Biden-Harris administration and the department of education encourage federal loan borrowers to send in their applications as early as possible. This is because the payment pause, which is currently in effect, will end on December 31, 2022.

It would be beneficial to receive your debt relief before the payment pause ends. This is because those who are eligible for loan forgiveness may have their entire debt forgiven, or may have much lower monthly payments after accounting for loan forgiveness.

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Therefore, those who have their loans forgiven before the payment pause ends will have to spend much less on their student loans after the payment pause ends. Borrowers who do not send in their applications before the end of the year may have to continue making regular federal student loan repayments. It’s possible that you can save a lot of money on monthly payments by applying for forgiveness so that your payments are reduced in 2023.

However, it’s still okay to apply for forgiveness any time before December 31, 2023. Borrowers have a little over a year to send in their applications, providing ample time for the applications to be processed. Applications may still be in the process of being evaluated in 2024, but the deadline to send in your application is December 31, 2023.

Frequently asked questions about student loan forgiveness

What is the deadline for student loan forgiveness?

All borrowers must send in their application for review before December 31, 2023. Though applications can be processed after this date, no new applications will be accepted in 2024.

How much will student loan forgiveness cost each taxpayer?

The department of education estimates that the student debt forgiveness plan will cost around $30 billion in total, per year. That means that over the next decade, it is estimated that the entire forgiveness program will cost around $305 billion.

Given the steep cost of student loan forgiveness, taxpayers will need to help provide funds for the program. It’s predicted that the cost of federal student loan forgiveness will be about $2,500 per taxpayer. However, this amount will likely be paid gradually over years— not all at once.

Debt relief may be a costly plan, but if you are one of the millions of borrowers who will be able to have your debt forgiven, make sure to take advantage of this program. Check your loans to see if your federal student loans are eligible for student loan forgiveness, and make sure to follow up with your loan servicers to see if your application was approved.

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For those who receive some loan forgiveness, but still have remaining loan balances, consider scholarships as a way to reduce your student loan debt. Though federal student loans may be a more consistent form of financial aid, scholarships collect no interest and do not need to be repaid in any way.

Scholarships can help pay for college without adding to any existing student loan debt. In addition, scholarships can help borrowers pay off their existing student loans— most scholarships will allow you to use the money for school fees or for educational debts.

Consider making a free profile with Bold.org today to gain access to high-quality scholarship and debt relief resources.