Biden’s student loan forgiveness: your questions answered

The application for student loan forgiveness won’t be ready until October, according to a White House official, with relief coming about four to six weeks after a borrower applies.

National Economic Council Deputy Director Bharat Ramamurti on Friday said to expect the application process to be online in early October and that borrowers should apply by November 15 to get relief before the pause on student loan payments expires on December 31.

The Education Department will process applications on an ongoing basis, Ramamurti told reporters at the White House Press Briefing.

President Joe Biden announced a slew of student loan debt relief measures on Wednesday, including cancelation of up to $20,000 in debt for some Americans.

The Education Department estimates about 27 million borrowers qualify to receive some amount of relief, helping borrowers struggling with their repayment obligation.

Here’s what else you need to know about Biden’s student loan debt forgiveness.

Who qualifies for $20,000 in student loan debt forgiveness?

Borrowers who received Pell Grants and make less than $125,000 as individuals or less than $250,000 as married couples are eligible to receive $20,000 in student loan debt forgiveness. Your income is based on either your 2020 or 2021 federal tax return.

What is a Pell Grant?

Pell Grant is a federal grant to low-income undergraduates who have not yet earned a first bachelor’s degree with the greatest demonstrated financial need. Eligibility is determined from documentation provided on the free application for federal student aid, known as FAFSA. In 2020-21, approximately 6.4 million students received a Pell Grant with the average award of $4,166 and over 78% of recipients had family incomes of less than $40,000, according to the National Association of Student Financial Aid Administrators (NASFAA).

Who qualifies for $10,000 in student loan debt forgiveness?

Those who did not receive Pell Grants but make less than $125,000 as individuals or less than $250,000 as a married couple are eligible for $10,000 in student loan debt forgiveness. Your income is based on either your 2020 or 2021 federal tax return.

Are current students with loans eligible for forgiveness?

Students currently enrolled in school with loans also can qualify for relief as long as their parents’ income is below the eligibility cap for single or married filers. Loans must have been originated before July 1 to be eligible.

Which types of student loans are eligible for forgiveness?

Only federally backed student loans are eligible for forgiveness. Loans from private banks and lenders don’t qualify. Both graduate and undergraduate loans are eligible for cancelation along with Parent PLUS loans taken out by parents or guardians, according to a press call with the administration.

How can I apply for student loan debt forgiveness?

You can’t apply yet. The Department of Education is working to set up a simple application process for borrowers to claim relief, according to the administration’s fact sheet. The application should be available by the time the pause on federal student loan payments expires at the end of the year. (The payment forbearance was originally set to expire August 31 until Biden extended it until December 31.)

Income limits must be verified, which may cause a delay for applicants whose data isn’t in the Education Department’s database. However, almost 8 million borrowers could be eligible to get relief automatically because their income data is already available to the Education Department.

What happens to any payments I made during the payment pause?

If you made payments during the federal student loan moratorium (beginning March 13, 2020), you can get a refund for payments made by contacting your loan service provider, according to the Federal Student Aid website.

Is this the same as the Public Service Loan Forgiveness (PSLF) program?

No. The Public Service Loan Forgiveness provides student debt forgiveness to those who have worked at least 10 years in public service jobs with federal, state, local, or certain non-profit organizations such as teachers, nurses, doctors, lawyers, and other professionals.

How can I stay updated on the student loan forgiveness application process?

Borrowers can get notifications when the application is available by signing up at

What happens with my payments if I’m not eligible for forgiveness or the forgiveness doesn’t cancel all my debt?

Biden also extended the pause or forbearance on federal student loan payments until December 31. The relief originally was set to expire on August 31. The extension will provide temporary relief for the remaining borrowers who are ineligible for forgiveness or who will receive limited relief from the elimination of $10,000 in debt.

Is the forgiven student loan debt taxable?

Not on the federal level. This debt relief will not be considered taxable income for federal income tax purposes because of a provision in the American Rescue Plan passed in March 2021.

Ronda is a personal finance senior reporter for Yahoo Money and attorney with experience in law, insurance, education, and government. Follow her on Twitter @writesronda

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Ronda Lee
Founder, Editor-in-Chief
Ronda is an attorney, writer, and entrepreneur. She is a contributing writer for the Huffington Post. Originally from Chicago, she has lived in Los Angeles and New York. She loves to travel and is passionate about education equity, especially for first generation college students.