How to Determine if You’re Eligible for the Federal Student Loan Forgiveness Plan

In August 2022, President Joe Biden announced federal student debt cancellation for approximately 43 million Americans. The Student Loan Forgiveness Plan will dismiss up to $20,000 in federal student loans for individual borrowers making less than $125,000 a year — or couples making less than $250,000 a year.

Pell Grants

If you received a Pell Grant as a form of financial aid as a college student, you will be eligible for the full $20,000 in federal loan forgiveness. If you did not receive a Pell Grant as a college student, you will still be eligible to receive up to $10,000 in forgiveness.

Should you be unable to recall if you received a Pell Grant, you can log into StudentAid.gov and navigate to your dashboard to see what types of loans you originally received.

Pell Grants are a form of federal financial aid typically gifted to undergraduate students with low or moderate incomes. ​The government reports that nearly 60% of students who received any form of federal financial aid in college also received a Pell Grant. Pell Grants are unique, in that — unlike most college loans — borrowers are not required to pay them back.

Federal Loan Eligibility

It’s important to note that only federally-made loans with an outstanding balance of June 30, 2022 are eligible for The Student Loan Forgiveness Plan. Private loans, or nonfederal loans (loans made by a lender such as a bank, credit union, state agency, or a school) will not be forgiven under the Student Loan Forgiveness Plan.

For these loans, as well as federal loans that are not supported by the Student Loan Forgiveness Plan (see section below), the best route is to partner with a Loan Servicer, especially if you are having trouble making monthly payments. 

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Loan Servicers can help you:

  • Switch your repayment plan to lower your monthly payments
  • Consolidate multiple federal loans into one loan which may result in a lower monthly payment
  • Help you apply for deferment or forbearance to temporarily postpone or reduce your payment

To find out who your Loan Servicer is, log into StudentAid.gov, navigate to your account dashboard, and scroll down to the “My Loan Servicers” section, or call the Federal Student Aid Information Center (FSAIC) at 1-800-433-3243.

List of Federal Loans Currently Eligible for Forgiveness

  • William D. Ford Federal Direct Loan (Direct Loan) Program loans
  • Consolidate multiple federal loans into one loan which may result in a lower monthly payment
  • Help you apply for deferment or forbearance to temporarily postpone or reduce your payment
  • William D. Ford Federal Direct Loan (Direct Loan) Program loans
    • Subsidized loans
    • Unsubsidized loans
    • Parent PLUS loans
    • Graduate PLUS loans
  • Federal Family Education Loan (FFEL) Program loans held by The U.S. Department of Education or in default at a guaranty agency
  • Federal Perkins Loan Program loans held by The U.S. Department of Education
  • Defaulted loans (includes The U.S. Department of Education-held or commercially serviced Subsidized Stafford, Unsubsidized Stafford, parent PLUS, and graduate PLUS; and Perkins loans held by the U.S. Department of Education)
  • Consolidation loans are eligible for relief, as long as all of the underlying loans that were consolidated were first disbursed on or before June 30, 2022.

To get more information about the types of loans that are eligible for forgiveness, visit the Department of Education’s official page at ed.gov. Borrowers can begin applying for loan forgiveness in early October 2022 and will be able to continue to submit applications through December 31, 2023.

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What Federal Loans are NOT Covered by The Federal Student Loan Forgiveness Plan — And What Options Do I Have?

If you were granted a privately-owned federal student loan, such as a FFEL or Perkins Loan, these loans are not currently eligible for forgiveness. The U.S. Department of Education is in discussions with the private lenders who own these loans to potentially open up these loans for eligibility.

While this decision pends, borrowers with privately-held federal student loans can receive relief by working with a Loan Servicer and consolidating these loans into the William D. Ford Federal Direct Loan (Direct Loan) Program, which is a type of loan that is eligible for forgiveness.

Again, to find out who your Loan Servicer is, log into StudentAid.gov, or call the Federal Student Aid Information Center (FSAIC) at 1-800-433-3243.

Check back at ICOHS.edu for further information to come, or contact the school at info@icohs.edu.

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