In August 2022, the Biden administration announced it would cancel up to $20,000 of federal student loans for qualifying individuals. 

There will also be a final extension of the student loan repayment pause through December 31, 2022. This includes the suspension of loan payments, 0 percent interest rate and stopped collections on defaulted loans. 

The Whitman College Office of Financial Aid has created this FAQ as a guide for students and graduates interested in learning more about the federal debt relief program.

Do I qualify for debt forgiveness? 

At this time, we know that loan forgiveness will apply to current students and borrowers who have federally-held undergraduate, graduate and Parent PLUS loans where the first disbursement was on or before June 30, 2022. Only those whose annual income is below $125,000 (or $250,000 for married couples or heads of households) will qualify. It is our understanding that for borrowers who were dependent students during the 2021-22 academic year, eligibility for relief will be based on their parents’ income. 

What types of debt qualify for cancellation?

Only federal student loan debt, not private loans, are eligible. In addition, anyone employed by nonprofits, the military, or federal, state, Tribal or local government may be eligible for total federal loan forgiveness through Public Service Loan Forgiveness (PSLF). Note: the government has temporarily waived certain eligibility criteria for the PSLF program through the end of October. If you think you may be eligible, enroll online before November 1, 2022.

How much debt cancellation will I receive? 

Borrowers who are Pell Grant recipients may receive up to $20,000 in debt cancellation, while those who are not Pell Grant recipients may receive up to $10,000. To view your federal student loan history and confirm whether you have received a Pell Grant, log on here using your FSA ID and password. More information about Pell Grants and loan forgiveness is available here.

Do I only qualify if I completed my degree?  

No, the debt relief is not contingent on having finished your degree. 

Will I owe federal taxes on canceled debt? 

No. 

Will I owe state taxes on canceled debt?

Possibly, depending on where you live. 

How do I apply for debt cancellation?

The Department of Education has indicated that nearly eight million borrowers may be eligible to receive loan forgiveness automatically. You may be part of this group if you are already enrolled in some kind of income-driven repayment plan and submitted your most recent tax return. For everyone else, there will be an application available by early October. If you are not sure if your latest tax information is on file, go ahead and fill out this application as soon as possible once it is live. In the meantime, you can sign up for updates

When is the deadline to apply?

The Department of Education will stop taking applications for debt cancellation on December 31, 2023. However, Whitman College advises borrowers to apply before November 15th, 2022 in order to receive debt relief before the payment pause expires at the end of this calendar year. More information about the timeline is available here.