$10,000-$20,000 in One-Time Student Loan Debt Relief
Update: Courts have issued orders blocking the One-Time Student Loan Debt Relief. As a result, the U.S. Department of Education is not accepting applications while it seeks to overturn the court orders. If you already applied, your application will be held by the U.S. Department of Education. You can monitor studentaid.gov for news about the One-Time Student Loan Debt Relief and subscribe for email updates.
Under President Biden’s One-Time Student Loan Debt Relief program, borrowers with federal student loans owned by the U.S. Department of Education will be eligible to receive $10,000 in federal student loan debt relief if their individual income was under $125,000 ($250,000 for married couples or heads of household) in either 2020 or 2021. Eligible borrowers who received a Pell grant to attend college will get an additional $10,000 ($20,000 total) in cancellation under the President's plan.
Federal loans owned by private companies or colleges, including many FFELs and Perkins Loans, will not be eligible for the One-Time Student Loan Debt Relief, unless the borrower applied to consolidate them into the Direct Loan Program before Sept. 29, 2022.
To find out if your federal loans are federally or privately owned, follow these instructions or call the Federal Student Aid Information Center at 1-800-433-3243.
WARNING: Beware of Mixing Federal Loans Owned by the U.S. Department of Education with Federal Loans Owned by Private Companies or Colleges in a Consolidation. If you apply after Sept. 28, 2022 to consolidate federally owned loans (e.g., Direct Loans or federally owned FFELs or Perkins Loans) with privately owned loans (e.g., privately owned FFELs or Perkins Loans), your Direct Consolidation Loan will not be eligible for the One-Time Student Loan Debt Relief.
Ways to Learn More:
One-Time IDR Adjustment
Income-driven repayment (IDR) plans forgive your remaining loan balance after 240 or 300 months of qualifying payments. Through the One-Time IDR Adjustment, even if you’ve never enrolled in an income-driven plan, you can receive credit toward IDR loan forgiveness for past repayment periods and certain deferment and forbearance periods.
Most borrowers will see the results of the Adjustment and how many months they have accrued towards IDR loan forgiveness in their studentaid.gov accounts in 2024. Borrowers who reach 240 or 300 qualifying months through the Adjustment will receive loan forgiveness in Spring 2023.
The One-Time IDR Adjustment is intended to address the harm that federal loan servicers caused by inappropriately steering borrowers into long-term forbearances and failing to advise them of income-driven repayment options.
- You may need to consolidate. Some federal loans are owned by the U.S. Department of Education, but others are owned by private companies or colleges. To benefit from the One-Time IDR Adjustment, you will need to consolidate any federal loans owned by private companies or colleges into the Direct Loan Program by Dec. 31, 2023.
- To find out if some or all of your federal loans are privately owned, read these instructions or call the Federal Student Aid Information Center at 1-800-433-3243.
- If some of your loans have been in repayment longer than others, consolidating may help you get forgiveness faster on your more recent loans. Through the One-Time IDR Adjustment, Consolidation Loans will be credited with the largest number of qualifying months among the loans that were consolidated. So, if some of your loans have been in repayment longer than others, forgiveness will come faster on your more recent loans if you consolidate them with your older loans.
- WARNING: Beware of Mixing Federal Loans Owned by the U.S. Department of Education with Federal Loans Owned by Private Companies or Colleges in a Consolidation. If you consolidate federally and privately owned federal loans together before the $10,000 to $20,000 in One-Time Debt Relief is implemented, your resulting Consolidation Loan will not be eligible for the debt relief. Therefore, if you intend to apply for the debt relief and want to consolidate these loan types together, consider waiting until after you’ve received the debt relief (or it’s been cancelled by the Supreme Court).
- Plan to enroll in IDR. To continue working toward IDR loan forgiveness after the One-Time IDR Adjustment is implemented, most borrowers will need to enroll in an income-driven plan. Keep in mind that the U.S. Department of Education intends to create a new less expensive income-driven plan in late 2023 or 2024. For more information and to apply for an income-driven plan, visit the U.S. Department of Education's website.
Ways to Learn More:
Read about the One-Time IDR Adjustment on the U.S. Department of Education’s webpage.
One-Time Adjustment for Public Service Loan Forgiveness (PSLF)
The PSLF Program forgives the remaining balance on your Direct Loans after you have made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer. Many borrowers have had difficulty accessing PSLF due to its complex rules and poor administration.
Last year, the U.S. Department of Education announced a historic temporary waiver of the PSLF Program’s rules. The waiver, called the “Limited PSLF Waiver,” allowed borrowers to get credit towards loan forgiveness for past repayment periods that would not otherwise qualify for PSLF. This helped many borrowers achieve or get closer to loan forgiveness. Although the Limited PSLF Waiver ended on Oct. 31, 2022, there is good news! With a few exceptions, the Limited PSLF Waiver is effectively continuing through the One-Time Adjustment for PSLF. Additionally, Parent PLUS Loans (whether consolidated or unconsolidated) are eligible for the One-Time Adjustment for PSLF.
- To benefit, some borrowers need to consolidate their non-Direct Loans into the Direct Loan Program by Dec. 31, 2023. To qualify for the One-Time Adjustment for PSLF, federal loan types that are not Direct Loans (e.g., FFELs or Perkins Loans) must be consolidated into the Direct Loan Program by Dec. 31, 2023.
- To find out if one or more of your federal loans is not a Direct Loan, follow these instructions or call the Federal Student Aid Information Center at 1-800-433-3243.
- WARNING: Beware of Mixing Federal Loans Owned by the U.S. Department of Education with Federal Loans Owned by Private Companies or Colleges in a Consolidation. If you consolidate federally and privately owned federal loans together before the $10,000 to $20,000 in One-Time Debt Relief is implemented, your resulting Consolidation Loan will not be eligible for the debt relief. Therefore, if you intend to apply for the debt relief and want to consolidate these loan types together, consider waiting until after you’ve received the debt relief (or it’s been cancelled by the Supreme Court).
- To find out who owns your federal loans, read these instructions or call the Federal Student Aid Information Center at 1-800-433-3243.
- File PSLF Forms to Certify your Employment. The U.S. Department of Education can’t give you credit for your months of public service if it doesn’t know about them! If you don’t have approved employment certifications on file for all your past qualifying employment periods since Oct.1, 2007, you must file a PSLF Form to certify your employment for each uncertified period. We recommend filing your PSLF Form(s) as soon as possible so that your employment is certified before the One-Time Adjustment for PSLF occurs. If you’re not sure whether you’ve successfully certified your employment, to be on the safe side, you should work with your employer’s HR Department to fill out a PSLF Form and submit it to MOHELA, the designated PSLF servicer.
- On Dec. 28, 2022, the U.S. Department of Education announced that both consolidated and unconsolidated Parent PLUS loans are eligible for the One-Time Adjustment for PSLF. However, to continue earning credit towards PSLF after the payment pause ends, most Parent PLUS borrowers will need to consolidate.
Ways to Learn More:
Fresh Start for Defaulted Loans
Fresh Start is a free temporary program you can use to get your loans out of default and repair your credit report. But you need to act!
There are two easy ways to enroll in Fresh Start, and the process can take less than 10 minutes!
Online—Go to myeddebt.ed.gov and log in to your account. You may have to create a username and password because this account requires a different username and password from your studentaid.gov account.
Phone—Call 1-800-621-3115 (If you’re deaf or hard of hearing, the TTY number is 1-877-825-9923)
- Tip: Before calling, look up your income on your most recent federal tax return (line 11 of IRS Form 1040). But if you can’t find it or didn’t file taxes, don’t worry—you should still call.
- What to expect on the phone: It will take about 10 minutes. A representative will ask for some information to find your record, then ask why you are calling (your answer: Fresh Start, to get out of default). You will also get an opportunity to sign up for an income-driven repayment plan, which may offer payments as low as $0 per month. (Regardless of your monthly payment amount, no payments will be due until the pandemic payment pause ends.)
Note: if your loans are held by a guaranty agency, you will be directed to that agency.
The Fresh Start program will end one year after the pandemic payment pause ends. If you don’t enroll, your loans will remain in default, your credit will not be repaired, and you could be subject to involuntary collection (e.g., wage garnishment and/or tax refund interception).
If you use Fresh Start, the One-Time IDR Adjustment will be applied to your account. This means you’ll receive credit toward Income-Driven Repayment (IDR) forgiveness for any periods of repayment before default and certain forbearance and deferment periods. Any time you spent in default from March 2020 through the month you exit default will also count toward forgiveness.
If you need help enrolling in Fresh Start, please file a Student Loan Help Request with the Ombudsman’s Student Loan Assistance Unit.
Ways to Learn More:
Read more about the Fresh Start initiative on the U.S. Department of Education’s webpage.
Pandemic Payment Pause and 0% Interest Rate
Payments are currently paused and interest is 0% for federal student loans owned by the U.S. Department of Education. This payment pause and 0% interest rate will end 60 days after the U.S. Department of Education is permitted to implement the One-Time Debt Relief or the litigation surrounding the debt relief has been resolved. If the One-Time Debt Relief has not been implemented and the litigation has not been resolved by June 30, 2023 – payments will resume 60 days after that. Borrowers will be notified by their loan servicers before payments restart.
- Privately owned federal loans need to be consolidated into a Direct Consolidation Loan to access the remainder of the payment pause and 0% interest rate. If your federal loans are not owned by the U.S. Department of Education, you need to consolidate them into the Direct Loan Program to gain access to the remainder of the payment pause and 0% interest rate.
- To find out if some or all of your federal loans are not owned by the U.S. Department of Education, follow these instructions or call the Federal Student Aid Information Center at 1-800-433-3243.
- WARNING: Beware of Mixing Federal Loans Owned by the U.S. Department of Education with Federal Loans Owned by Private Companies or Colleges in a Consolidation. If you consolidate federally and privately owned federal loans together before the $10,000 to $20,000 in One-Time Debt Relief is implemented, your resulting Consolidation Loan will not be eligible for the debt relief. Therefore, if you intend to apply for the debt relief and want to consolidate these loan types together, consider waiting until after you’ve received the debt relief (or it’s been cancelled by the Supreme Court).
A More Affordable Income-Driven Repayment Plan
Income-Driven Repayment (IDR) plans base your payments on your taxable income and family size. These plans also offer potential interest subsidies and the possibility of loan forgiveness after 240 or 300 months.
The Biden-Harris Administration is proposing to make changes to one of the existing IDR plans, Revised Pay As You Earn (REPAYE). The revised REPAYE plan would be more affordable for lower- and middle-income borrowers. Specifically, it would:
- Require borrowers to pay no more than 5% of their discretionary income on undergraduate loans—down from the 10% presently required by REPAYE.
- Protect more income from repayment by only requiring borrowers to make payments on income that exceeds 225% of the federal poverty line, instead of 150%. This will guarantee that a single borrower working full-time earning about $15 per hour will not have to make a monthly payment.
- Forgive loan balances after 120 months of payments, instead of 240 months, for borrowers with original loan balances of $12,000 or less, making it much more cost effective for borrowers with low balances to use IDR.
- Cover unpaid monthly interest, so that unlike existing IDR plans, no borrower’s loan balance will grow as long as they make their monthly payments—even when that monthly payment is $0 because their income is low.
The new more affordable REPAYE plan is expected to be available in late 2023 or 2024 and will only be available to Direct Loan borrowers.
Under the Department’s proposal, Parent PLUS Loans would not have access to the new IDR plan. However, the less favorable income-contingent repayment plan will still be available to Parent PLUS borrowers who have consolidated their Parent PLUS loans into a Direct Consolidation Loan.
- You may need to consolidate. Borrowers can have several different types of federal loans, including Direct Loans, FFELs, and Perkins Loans. To be eligible for the new more affordable IDR plan, federal loan types that are not Direct Loans (e.g., FFELs or Perkins Loans) will need to be consolidated into the Direct Loan Program.
- To find out if one or more of your federal loans are not Direct Loans, follow these instructions or call the Federal Student Aid Information Center at 1-800-433-3243.
- WARNING: Beware of Mixing Federal Loans Owned by the U.S. Department of Education with Federal Loans Owned by Private Companies or Colleges in a Consolidation. If you consolidate federally and privately owned federal loans together before the $10,000 to $20,000 in One-Time Debt Relief is implemented, your resulting Consolidation Loan will not be eligible for the debt relief. Therefore, if you intend to apply for the debt relief and want to consolidate all your loan types together, consider waiting until after you’ve received the debt relief (or it’s been cancelled by the Supreme Court).
- To find out who owns your federal loans, read these instructions or call the Federal Student Aid Information Center at 1-800-433-3243.
Avoid Scams
Student loan “debt relief” companies charge fees for helping student loan borrowers access federal loan debt relief programs. There is nothing these companies can do for you that you can’t do on your own for free!
Some of these companies are trying to take advantage of circumstances related to the pandemic and the One-Time Student Loan Debt Relief. They may even pretend to work with the U.S. Department of Education or a government agency. If anyone contacts you asking for your personal information (like your FSA ID and password), your bank account information, or money to help you access debt relief—they’re trying to scam you.
The U.S. Department of Education is not accepting new applications for the One-Time Student Loan Debt Relief while the Supreme Court case is pending. If and when the application becomes available again, there will be no cost to apply and you will be able to apply directly on https://studentaid.gov/. There is nothing third parties can do to speed up debt cancellation or get you more relief.
Only scammers will ask you to pay for student loan debt relief. You can visit the U.S. Department of Education’s website to learn more about the other warning signs of a debt relief scam.
Prepare for the Return to Repayment
The payment pause and interest waiver will end 60 days after the U.S. Department of Education is permitted to implement the $10,000-$20,000 in One-Time Debt Relief or the litigation surrounding the One-Time Debt Relief has been resolved. If the One-Time Debt Relief has not been implemented and the litigation has not been resolved by June 30, 2023 – payments will resume 60 days after that date.
You should begin exploring your repayment options, including income-driven repayment (IDR) plans, before repayment resumes. IDR plans base your payments on your taxable income and family size. These plans also offer potential interest subsidies and the possibility of loan forgiveness after 240 or 300 months.
We recommend enrolling now to ensure that your income-driven payments are calculated by the time the payment pause ends.
Keep in mind that even if you have never enrolled in an income-driven repayment plan, your past repayment periods and certain forbearance and deferment periods will count toward forgiveness under IDR plans after the One-Time IDR Adjustment is implemented. These qualifying payment counts are expected to be visible in your studentaid.gov account in 2024. To continue earning credit toward IDR forgiveness after the One-Time IDR Adjustment is implemented, you’ll need to enroll in an IDR plan and recertify for it each year. In the future, payments under IDR plans are expected to be even more affordable, as the U.S. Department of Education intends to create a new less expensive IDR plan in late 2023 or 2024.
If you were repaying your loans under an income-driven plan when the payment pause began in March 2020, you won’t be asked to recertify your income until at least six months after the payment pause ends. If your income has decreased since the last time you recertified, you may want to recertify early so you can lower your payment amount.
Ways to Learn More:
Get tips from the Attorney General’s Office on preparing for the return to repayment.
Get Help from the Ombudsman's Student Loan Assistance Unit
If you live in Massachusetts and need help accessing federal loan debt relief or have a complaint against a loan servicer, you can file a Student Loan Help Request with the Ombudsman’s Student Loan Assistance Unit. When filling out the request, please describe your student loan situation in as much detail as possible. Borrowers who don’t live in Massachusetts can review this list of resources.
Your Student Loan Help Request form will be reviewed in the order in which it was received. It is very important that you continue to meet any deadlines while you are waiting to hear from us. If your request would be better handled by a different government agency, we will refer you to that agency.
The Attorney General's Office cannot provide you with legal advice or act as your attorney. If you have questions concerning the specific application or interpretation of the law, please consult with a private attorney.
While waiting to hear from us, we encourage you to collect information about your federal student loans by creating an account on the U.S. Department of Education's Federal Student Aid (FSA) website at studentaid.gov. Once logged in to your account, you will see a full list of your federal student loans, along with servicer contact information, loan types, interest rates, principal and interest balances, and other information that will help clarify your repayment options and the steps needed to access debt relief. Private student loans are not tracked by the U.S. Department of Education but may be listed on your credit report. You can obtain a free copy of your credit report once a year from each of the three major credit reporting agencies.
U.S. Department of Education Resources
- Create your FSA ID
- Login to Studentaid.gov to Review your Federal Loans
- Apply to Consolidate Your Loans
- Income-Driven Repayment Plans
- Loan Repayment Plan Simulator
- Public Service Loan Forgiveness
- Temporary Expanded Public Service Loan Forgiveness
- Teacher Loan Forgiveness
- Perkins Loan Cancellation
- Total and Permanent Disability Discharge