Many St. Thomas alumni, current students, and families have reached out with questions on the Federal Government's announcement about Student Debt Relief. Studentaid.edu/debtrelief is the best source for detailed and updated information on the newly announced Federal Student Loan Forgiveness program and other changes to federal student loans.
However, we have provided some helpful, quick information below on the Biden administration’s student debt relief plan.
Forgives $10,000 ($20,000 for Pell Grant Recipients) to qualifying borrowers.
Federal student loans included in this program:
The eligible federal student loan must be fully disbursed prior to June 30, 2022.
The amount eligible to be forgiven for qualifying borrowers is $10,000. If a student received a Pell Grant while in college, the amount eligible to be forgiven will increase to $20,000. Students can review their federal loan and grant history at studentaid.gov.
If the balance is less than $10,000, the loan(s) will be retired. Relief is capped at the amount of outstanding eligible debt in this situation.
Only borrowers who earned less than $125,000 as an individual or $250,000 as part of a household will be eligible for forgiveness. Borrowers who were dependent students in 2021-2022 year will be eligible for relief based on parental income, rather than their own income.
If the Department of Education (ED) has the borrower’s income information, the forgiveness may happen automatically.
If the ED does not have the borrower’s income information, the borrower will need to apply. ED has stated the application will be available by the end of the year. Borrowers can sign up for a notification when the application is available at: ed.gov/subscriptions.
Federal student loan payments and interest will restart in January 2023. Borrowers should consult Studentaid.gov to view federal loan servicer information and update contact information.
Additional changes have been proposed for income-based repayment plans.
In addition to the newly announced student loan forgiveness, borrowers who are employed by non-profits, the military, or federal, state, Tribal, or local government may be eligible to have all of their student loans forgiven through the Public Service Loan Forgiveness (PSLF) program. This is because of time-limited changes that waive certain eligibility criteria in the PSLF program. These temporary changes expire on October 31, 2022.
The St. Thomas Financial Aid team is learning about this program via the same channels open to you. According to the StudentAid.gov Announcement page, the best way to stay updated is to sign up for email updates from the US Department of Education.