Congresswoman Terri Sewell

Representing the 7th District of Alabama
 

Student Loans

On Aug. 24, 2022, the Biden-Harris Administration announced a Student Debt Relief Plan that includes one-time student loan debt relief targeted to low- and middle-income families. The U.S. Department of Education (ED) will provide up to $20,000 in debt relief to Federal Pell Grant recipients and up to $10,000 in debt relief to non-Pell Grant recipients. Borrowers with loans held by ED are eligible for this relief if their individual income is less than $125,000 (or $250,000 for households).

For more information about student loan debt relief, click here.

Frequently Asked Questions (FAQs)

Am I eligible for one-time student loan debt relief under President Biden's plan?

You're eligible for student loan debt relief if your annual federal income was below $125,000 (individual or married, filing separately) or $250,000 (married, filing jointly or head of household) in 2021 or 2020.

  • $20,000 in debt relief: If you received a Pell Grant in college and meet the income threshold, you'll be eligible for up to $20,000 in debt relief.
  • $10,000 in debt relief: If you did not receive a Pell Grant in college and meet the income threshold, you'll be eligible for up to $10,000 in debt relief.

What kinds of loans are eligible?

The following types of federal student loans with an outstanding balance as of June 30, 2022, are eligible for relief:

  • 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 ED or in default at a guaranty agency
  • Federal Perkins Loan Program loans held by ED
  • Defaulted loans (includes ED-held or commercially serviced Subsidized Stafford, Unsubsidized Stafford, parent PLUS, and graduate PLUS; and Perkins loans held by ED)

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.

How do I know what kinds of loans I have?

You can identify your loan types by logging on to StudentAid.gov and selecting “My Aid” in the dropdown menu under your name. In the “Loan Breakdown” section, you'll see a list of each loan you received. You'll also see loans you paid off or consolidated into a new loan. If you expand “View Loans” and select the “View Loan Details” arrow next to a loan, you'll see the more detailed name for that loan.

Direct Loans begin with the word “Direct.” Federal Family Education Loan Program loans begin with “FFEL.” Perkins Loans include the word “Perkins” in the name. If the name of your servicer starts with “Dept. of Ed” or “Default Management Collection System,” your FFEL or Perkins loan is federally managed (i.e., held by ED).

The “My Aid” section will also show you the servicer(s) for your loans.

How do I know if I've ever received a federal Pell Grant?

Federal Pell Grants typically are awarded to undergraduate students with low or moderate income. Most borrowers can log in to StudentAid.gov to see if they received a Pell Grant. Information about the aid you received, including Pell Grants, is displayed on your account dashboard and your “My Aid” pages.

Log In to Your Account

When you apply for debt relief, the Department of Education will make sure all borrowers who received a Pell Grant receive the full benefit of up to $20,000 in relief if they meet the income requirements. ED has data on all borrowers who received a Pell Grant. If you received a Pell Grant prior to 1994, that information won't display in StudentAid.gov, but you'll still receive the full benefit.

Do I still qualify for the full $20,000 in debt relief if I received only one Pell Grant?

Yes. As long as you received at least one Pell Grant of any amount, you qualify for the additional $10,000 in debt relief. This additional $10,000 will be applied to eligible loans, such as undergraduate, graduate, or parent loans. It doesn't matter if the Pell Grant was used for the same program of study or at the same school as your federal student loan(s).

Are private loans (i.e., non-federal loans) eligible for debt relief?

No. Private (non-federal) loans are not eligible for debt relief. If you consolidated federal loans into a private (non-federal) loan, the consolidated private loan is not eligible for debt relief.

I am eligible. What should I do to prepare? 

An online form will be available by early October. Here's what you can do to get ready and to make sure you get updates:

  • Log in to your account on StudentAid.gov and make sure your contact info is up to date. The Department of Education will send you updates by both email and text message, so make sure to sign up to receive text alerts. If it's been a while since you've logged in, or you can't remember if you have an account username and password (FSA ID), the Department offers tips to help you access your account.
  • If you don't have a StudentAid.gov account (FSA ID), you should create an account to help you manage your loans.
  • Make sure your loan servicer has your most current contact information so they can reach you. If you don't know who your servicer is, you can log in and see your servicer(s) in your account dashboard.

Am I eligible for a refund if I made voluntary payments during the pandemic?

Yes. You will automatically receive a refund of your payments during the payment pause if:

  • you successfully apply for and receive debt relief under the Administration's debt relief plan, AND
  • your voluntary payments during the payment pause brought your balance below the maximum debt relief amount you're eligible to receive but did not pay off your loan in full.
  • For example, if you're a borrower eligible for $10,000 in relief; had a balance of $10,500 prior to March 13, 2020; and made $1,000 in payments since then—bringing your balance to $9,500 at the time of discharge—we'll discharge your $9,500 balance, and you'll receive a $500 refund.

Other borrowers can still receive refunds on voluntary payments made after March 13, 2020 by contacting their servicer. It's important to note that these refunded payments will increase your loan balance and your monthly payments. If you expect to have a balance after discharge is applied and wish to request a refund, you can do so by contacting your servicer until Dec. 31, 2023.

If you consolidated your loan after March 13, 2020, refunds aren't available for any voluntary payments made prior to the consolidation.

Refund requests can only be made by you and refunded to you, even if someone else made a payment on your loan.

What is the deadline to submit my application?

Once the application goes live, you'll have until Dec. 31, 2023, to submit your application.

I still have loans to repay. When will I need to begin repaying them?

The pause on student loan payments will end on December 31, 2022. Payments will resume in January 2022.

How can I prepare for payments to resume?

Here are four steps to make sure you’re prepared for student loan payments to resume:

  • Update your contact information in your profile on your loan servicer’s website and in your StudentAid.gov profile.
  • Review your auto-debit enrollment or sign up for the first time. To do so, log in to your ’s website or contact your  servicer directly.
  • Check out Loan Simulator to find a repayment plan that meets your needs and goals or to decide whether to consolidate.
  • Consider applying for an income-driven repayment (IDR) plan. An IDR plan can make your payments more affordable, depending on your income and family size.

For more information about restarting student loan payments, click here.

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