The U.S. Department of Education recently announced a three-part plan to help relieve student debt that borrowers have acquired.
Student Debt Relief plan
The plan will provide borrowers with loan cancellation of up to $20,000 in debt relief for previous Pell Grant recipients—with loans held by the Department of Education—and up to $10,000 to non-Pell Grant recipients. Borrowers can qualify for this relief if their individual income is less than $125,000 or $250,000 for households for 2021 or 2020.
This only applies to federal loans taken out before June 30, 2022. Parents who took out PLUS loans can apply for a partial cancellation as well. There is a time limit to apply, and we recommend that you do so as soon as possible. Applications are available on the link below.
Full details regarding the three-part Student Debt Relief plan are publicly available on the web.
Public Service Loan Forgiveness
The Public Service Loan Forgiveness (PSLF) program forgives the remaining balance on a borrower's federal student loans after 120 payments, if the borrowers are working full time for a federal, state, tribal, or local government; the military; or a qualifying nonprofit. Students may be eligible to have some of their loans forgiven. This provision expires on Oct. 31, 2022. Eligibility requirements and an application can be found online.
"Fresh Start" program
The "Fresh Start" government initiative will assist students if they are in default on their federal student loans. Thanks to "Fresh Start," borrowers can temporarily regain student aid eligibility and have the opportunity to get out of default.
For "Fresh Start" instructions and details on the eligible loans, please visit the Federal Student Aid "Fresh Start" on the web.
