Debt relief between $10,000 and $20,000 is on the way for an estimated 43 million student loan borrowers who meet certain income requirements.
“When I campaigned for President, I made a commitment that we’d provide student debt relief. And I’m honoring that commitment today,” President Joe Biden said on Aug. 24.
Do current college students qualify for student loan forgiveness?
Yes, current college students qualify for student loan forgiveness, if they or their parents meet certain income requirements and the loans were taken out before July 2022.
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Current college students with loans are eligible for debt relief, the White House says in its fact sheet on the student loan forgiveness plan.
Their eligibility comes down to two factors. The first is their income.
Borrowers who are dependents will be eligible for relief based on their parents’ income, rather than their own, according to the White House.
Under the Biden administration’s student loan forgiveness plan, borrowers and parents of dependent borrowers are eligible if their income is less than $125,000 for individuals, and less than $250,000 for married couples or heads of households.
If a person's income in either the 2020 or 2021 tax years was below these income caps, they are eligible for debt forgiveness, senior officials with the Biden administration said.
“The income thresholds will be applied to your parents to determine whether or not you are eligible for debt you have taken out up to 2022,” Jessica Thompson, vice president at The Institute for College Access and Success, said.
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The second factor that determines whether current students are eligible for debt forgiveness is when they took out their loans.
The Institute of Student Loan Advisors says on its website that the loan “has to have been fully disbursed by June 30, 2022” to be included. Susan Rice, domestic policy advisory for the Biden administration, also confirmed this date during a press conference on Aug. 24.
“No one can go out and take out a new loan right now to take advantage of this policy,” Thompson said.
Betsy Mayotte, president and founder of The Institute of Student Loan Advisors, told VERIFY she hasn’t heard of any other exclusions for current students with outstanding loans.
Eligible students might not have to apply for debt forgiveness because the Department of Education already has their income data.
Abby Shafroth, director of the Student Loan Borrower Assistance Project at the National Consumer Law Center, told VERIFY that roughly 6 million out of the 8 million borrowers who may be automatically eligible for student loan forgiveness are those whose families recently completed the Free Application for Federal Student Aid (FAFSA).
The application for student loan forgiveness became available on Monday, Oct. 17. People have until Dec. 31, 2023 to apply for debt relief.