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Biden Student Loan Forgiveness Plan: Everything You Need to Know

Student loan forgiveness has been an ongoing debate in the federal government. Here’s how to get up to $20,000 in student debt canceled.

Justin Cupler

Contributing Writer at Tally

October 6, 2022

There has been a lot of back and forth between the Biden administration and Congress regarding student loan forgiveness. The back and forth is now over, as the White House and the Department of Education have finally released the official Biden student loan forgiveness plan.

Beginning in late 2022, this program will forgive large chunks of student loan debt for working- and middle-class families.

So, how much is the Biden student loan forgiveness, and do you qualify for it? We cover all this and more below.

The student loan repayment freeze

The Biden student loan forgiveness plan starts with one final freeze of student loan payments. The White House’s latest freeze stops all required payments through December 31, 2022. Student loan payments will resume in January 2023.

This freeze stems back to the coronavirus pandemic-fueled student loan freeze that former-president Donald Trump and President Joe Biden have renewed several times. This is the final renewal, according to the Biden administration.

As with all the previous monthly payment pauses, this only affects federal student loans. Private student loans are not included.

The one-time Biden student loan debt relief program eligibility

The Biden student loan relief program extends well beyond just another few months of no student loan payments. It also forgives a chunk of loan balances for select federal student loan borrowers. Here are all the eligibility terms of the Biden student loan cancellation plan.

Current student loan debt

Of course, to qualify for the Biden student loan forgiveness plan, borrowers must have current federal student loans issued through the U.S. Department of Education (ED). This program will not retroactively repay those who paid off student loans in earlier years.

Not all federal student loan debt is eligible for this forgiveness plan. Eligible federal student loan types are as follows:

  • William D. Ford Federal Direct Loan Program loans, including subsidized loans, unsubsidized loans, parent PLUS loans, graduate PLUS loans and consolidation loans that were initially disbursed on or before June 30, 2022

  • Federal Family Education Loan (FFEL) Program loans held by ED or in default at a guaranty agency

  • Federal Perkins Loan Program loans held by ED

  • Defaulted loans, including ED-held, subsidized Stafford, unsubsidized Stafford, parent PLUS and graduate PLUS loans or those held by loan servicers, as well as Perkins loans held by the Education Department

Income requirements

To qualify for the Biden student loan forgiveness program, borrowers must fall within specific income guidelines. A borrower:

  • That files taxes as single or married and filing separate must earn less than $125,000 in 2021 or 2022

  • Married, filing jointly or those filing as head of household must earn less than $250,000 in 2021 or 2022

Forgiveness amount

If a borrower meets the income requirements, they could qualify for one of two tiers of the Biden student loan forgiveness plan. 

If they:

  • Meet the income requirements 

  • Were a Pell Grant recipient while attending college

They could have up to $20,000 in student loan debt forgiveness.

Borrowers who:

  • Did not receive a Pell Grant in college 

Are limited to $10,000 in student loan debt cancellation.

The federal government has no plans to forgive any additional federal student loan debt beyond $10,000 or $20,000. If your student loan debt exceeds the forgiveness amount, you are responsible for repaying the remaining balance.


How to prepare for the Biden student loan cancellation program

Before the student loan forgiveness program officially begins, borrowers will want to prepare for its rollout. 

Start by logging in to or creating your account and verifying your mailing address, email address and cellphone number are accurate. You’ll receive updates on the Biden student loan forgiveness plan via email and text. Also, ensure to opt-in to text message alerts so you never miss an update.

Reach out to your loan servicer, too and verify the contact information it has for you is up to date. You can find who your student loan servicer is on your account dashboard on

Submit your official Biden student loan forgiveness application

In early October 2022, the federal government officially plans to launch the student loan forgiveness plan. Once live, borrowers have until December 31, 2023, to submit applications.

The Education Department will review your tax history, your income information and whether you were a Pell Grant recipient or not. It will then approve or deny you for the $10,000 or $20,000 loan forgiveness plan.

Once your application is processed and the student loan forgiveness is issued, your loan servicer will notify you of how much relief you received and any remaining balance. 

If there is a remaining balance, it will be re-amortized, and your monthly loan payment will be calculated based on your new balance. You will receive a new payment amount and schedule from your loan servicer.

Frequently asked questions

There are bound to be many questions surrounding the debt forgiveness process. Below, we’ll touch on some of the more pressing questions.

What if I paid off my loans during the payment freeze? 

If you paid off your student loans during the coronavirus pandemic-fueled student loan payment freeze — between March 13, 2020, and December 31, 2020 — you can request a refund for all those payments. Once you receive your refund, the amount you received back will be added to your loan balance. You can then request forgiveness for that balance. 

Contact your loan servicer to learn more about its refund process. 

What if I am not currently paying my loans?

Regardless of your payment status, you will receive loan forgiveness based on your income and Pell Grant status.

What if I have more than one student loan?

Federal Student Aid will decide which of your loans get the amount of forgiveness and instruct your loan servicers.

What’s the hierarchy for applying forgiveness to loan types?

The Education Department will apply forgiveness to loan types in the following order:

  1. Defaulted ED-held loans

  2. Defaulted commercial FFEL Program loans

  3. Non-defaulted Direct Loan Program loans and FFEL Program loans held by ED

  4. Perkins Loans held by ED

If you have:

  • Multiple loans in the same category, the relief will initially go to the loans with the highest interest rate

  • Multiple loans with the same interest rate, the unsubsidized loans will get relief before subsidized loans

  • Loans with the same interest rate and subsidy status, the most recent loan gets the relief first 

  • Loans have the same interest rate, subsidy status and disbursement date, the loan with the lowest principal and interest balance gets the relief first

Will debt relief be taxed?

Many loan forgiveness programs, such as the income-driven repayment plan, may result in tax bills for the forgiven amount. However, this student loan debt forgiveness plan, much like the public service loan forgiveness (PLSF) plan, the IRS doesn’t tax the forgiven amount as income.

Even though the federal government won’t collect tax, some states may tax it as income. For example, Indiana, Mississippi and North Carolina will all levy state income tax on the forgiven amount. Some other states have yet to decide whether or not they’ll levy state income tax: 

  • Arkansas

  • Minnesota

  • West Virginia

  • Wisconsin

Apply for student loan forgiveness before it’s too late

Student loan forgiveness has been long in the making. You can get up to $20,000 in forgiveness by completing your online application by December 31, 2023. Now’s the time to gather all the required information, update your contact details online and prepare to complete the application when it launches in early October 2022.

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