Who Qualifies For Biden's $39 Billion Student Loan Forgiveness? Here's How To Find Out

Topline

President Joe Biden and the Department of Education announced $39 billion in student loan forgiveness Friday (read more here), a watered-down version of his previous, more ambitious student loan forgiveness plan—but to find out if you qualify, you’ll need to look back at a repayment history stretching back at least two decades, keeping recent grads from immediate relief.

Students make their way through the Sather Gate near Sproul Plaza on the University of California at … [+] Berkeley campus in March 2022, in Berkeley, California.

Key Facts

Essentially, borrowers are already eligible for some forgiveness through a program that already exists after they’ve made at least 240 or 300 monthly payments—depending on what specific repayment plan they’re on and the loan they took out—but previously, months where payments were late, partial or deferred didn’t count toward that.

Friday’s announcement changes that, and monthly payments that previously didn’t count toward the forgiveness now will.

This applies to people on an income-driven repayment plan—which is a payment plan that is adjusted based on income and family size—or who were on one in the past, as well as people in the public service loan forgiveness program or people who have direct or federal family education loans held by the Department of Education.

Anyone who fits into one of these categories can determine their eligibility by adding up the number to the amount of normal monthly payments they’ve made, the number of months they’ve made late or partial payments, the number of months they’ve paused repayment (but only if they’ve spent 12 or more consecutive months or 36 or more cumulative months pausing payments) and the amount of months they’ve deferred payment (but only economic hardship or military deferments count after January 1, 2013, while in-school deferments don’t count if they happened before 2013).

If the number reaches a minimum of 240 or 300 months depending on the type of program borrowers are in, they’ll be eligible for student loan forgiveness.

To determine whether they need 240 or 300 months, borrowers will have to look at the specific type of repayment plan they’re on and the loan they took out.

For anyone struggling to count, the Department of Education will contact and notify everyone who will have loans forgiven as a result of these changes, starting Friday.

Surprising Fact

Unlike Biden’s earlier plan, the student loan forgiveness plan announced Friday doesn’t have a blanket amount of forgiveness for large swaths of borrowers. How much is forgiven is unique to each borrower and depends on several different factors.

Contra

Those who haven’t been paying at all for a number of years already are unlikely to be eligible.

News Peg

The student loan forgiveness announced Friday boils down to changes being made to a loan forgiveness program that already exists through the Higher Education Act and Department of Education regulations.

Key Background

Friday’s loan forgiveness comes two weeks after the Supreme Court struck down Biden’s more ambitious student loan forgiveness plan. Biden initially promised to forgive up to $20,000 in debt for 43 million federal borrowers, but a 6-3 conservative majority on the court ruled he didn’t have the authority to do so. The Supreme Court estimated that plan would’ve erased $430 billion in debt for 20 million borrowers. That’s compared to Friday’s $39 billion for 804,000 borrowers.

Crucial Quote

Under Secretary of Education James Kvaal argued that prior to Friday’s changes, “millions of borrowers had earned loan forgiveness but never received it,” which he said was “unacceptable.” “Today we are holding up the bargain we offered borrowers who have completed decades of repayment.”