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New student loan forgiveness: Who is eligible?

The White House is working to address and correct past failures with federal student loans.

student loan debt

Millions could be closer to student loan debt forgiveness.

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You could get immediate debt cancellation

The Department of Education had reviewed federal student loan programs. They found that borrowers have been incorrectly directed into forbearance. They plan to help those who have been impacted in the past. The Department of Education will also make changes to ensure that students who take out loans in the future don’t do the same. Read more about it here.

Federal Student Aid (FSA) will conduct a one-time adjustment. It is estimated that the adjustment will result in the immediate debt cancellation for thousands of borrowers.

Those who don’t qualify for immediate cancellation will likely be moved closer to forgiveness. If you think you were affected, contact the FSA Ombudsman.

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Who qualifies?

If you have had difficulty making payments on your student loans and were directed to taking short-term forbearance, you will likely benefit from the newest debt relief plan.

Loan servicers are required to give federal student loan borrowers “clear and accurate information.” This information is extra important to have when they are facing delinquency on their payments.

The FSA Review found that there are payment options that were overlooked. One of those being the income-driven repayment program (IDR). This program lets borrowers avoid loan default by adjusting their monthly payment. The monthly payments are calculated based on income and family size. Your monthly payment could be $0.

If you went into forbearance, your overall loan balance and monthly payments increased. This is because interest was accruing while in forbearance. This could lead to more delinquency or even loan default.

IDR is different. Enrolling in an IDR program could’ve allowed you to stay in good standing while making progress toward debt forgiveness.

If you have been impacted by this policy to steer you into forbearances by your loan servicer, there is help. You can file a complaint with FSA Ombudsman and have your account reviewed at

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Millions of students impacted

More than 3.6 million student loan borrowers will be at least three years closer to debt forgiveness. This estimate is from the FSA based on enrollment to the IDR program with the new action.

The FSA also estimated that several thousand people with older loans will see immediate cancellation through IDR.  This is because IDR promises loan forgiveness after 20-25 years of payment.

Action from the Biden administration will lead to another 40,000 student loan borrowers debt getting cancelled.  This immediate debt cancellation will happen under the Public Service Loan Forgiveness (PSLF) Program. If you’ve made 120 qualifying payments, you could have the remaining debt cancelled. The payments must have been made on a repayment plan while working for a qualified employer.

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