President Biden’s Student Loan Relief Plan

On August 24, 2022, the Biden administration announced a historic three-part plan to help address student debt – by providing targeted federal debt relief, easing the transition back to repayment, and working to make the student loan system more manageable. Using current pandemic relief authority, the President’s plan provides income-contingent one-time federal loan relief of up to $10,000 in education debt cancellation for non-Pell Grant recipients, and up to $20,000 in debt cancellation to Pell Grant recipients.

Below are some key points from the President’s August 24, 2022 announcement:

  • The student loan repayment pause has been extended through December 31, 2022 for borrowers who are no longer in school.
  • The President’s income-contingent loan forgiveness plan applies to borrowers, including continuing LIM College students, who have federal undergraduate and graduate Stafford Loans, Grad PLUS Loans, and Parent PLUS loans that were disbursed by June 30, 2022 (for the 2021-22 academic year and previous years).
  • Only people who earned less than $125,000 as an individual or $250,000 as part of a married couple in 2020 or 2021 will be eligible for forgiveness. The U.S. Department of Education (USDOE) has income data for most borrowers who completed a FAFSA for the 2021-22 academic year. Borrowers who were dependent students in 2021-22 will be eligible for relief based on parental income, rather than their own income. Many of these borrowers will receive automatic loan relief.
  • To help determine if you and/or your parent PLUS loan borrower(s) qualify and to ensure you receive eligible loan forgiveness, the Department of Education will be releasing an online application form reportedly in Early October. More information and FAQs are available on the Department’s Student Loan Debt Relief site.
  • Please note, if you qualify and your loan balance is less than $10,000, the loan will be retired for that amount (i.e., you will not receive any additional funds beyond your loan balance); if you received a Pell Grant while enrolled in college, the same principal applies up to a maximum of $20,000 that can be cancelled.
  • Sign up for updates from the Department of Education – check the box entitled “NEW!! Federal Student Loan Borrower Updates”.
  • Review the income eligibility requirements as outlined in the August 24 announcement. When available, complete the online application form that the Department of Education will be launching in early October. All eligible borrowers, especially those no longer in college, are strongly encouraged to complete this application by mid-November for processing prior to the end of the federal loan repayment pause on Dec. 31, 2022. To be notified when the application is open, sign up for updates.
  • Check your federal loan balance and Pell Grant award status by logging into your Federal Student Aid account online at studentaid.gov. Note: The Department of Education has a record of all prior federal student loan borrowing and Pell Grant recipients. You won’t need documentation from LIM College to verify your federal loan or Pell Grant history.
  • Please note, LIM alums and Parent Loan borrowers with remaining federal loan balances should prepare to resume repayments in January 2023. If you aren’t eligible for forgiveness, or if this forgiveness plan pays off only part of your loan balance, prepare for your loan payments to restart after December 31, 2022.
  • LIM alums who are working in public service or for a non-profit organization may be able to take advantage of the temporary limited Public Service Loan Forgiveness waiver. Borrowers must apply by October 31, 2022. More info about the Public Service Loan Forgiveness (PSLF) is available at www.pslf.gov.
  • Beware of any companies contacting you saying they will help you get loan discharge, forgiveness, cancellation, or debt relief for a fee. You never have to pay for help with your federal student aid. Make sure you work only with the U.S. Department of Education through the Federal Student Aid (FSA) office and their trusted partners, and never reveal your personal information or account password to anyone. FSA emails to borrowers come from noreply [at] studentaid.gov.
  • Click here for info on how to avoid scams and what you can do if you're contacted by a scammer.

President Biden’s plan also includes recommendations to make loan payments more manageable in the future – for more info see the White House Fact Sheet on Student Loan Relief. As more details regarding federal student loan relief are released by the U.S. Department of Education, we will share additional resources here. Visit studentaid.gov/debt-relief-announcement/ for the most up-to-date information, and please note that the details above may be subject to change.

After reviewing this information, if you still have further questions about your potential loan relief eligibility, please feel free to contact the LIM College Office of Student Financial Services at sfs [at] limcollege.edu or 212-752-1530 x389. LIM College alums who graduated within the past three years can also obtain free loan repayment counseling and assistance from our partner, ECMC Solutions, at 877-331-3262.