Skip to Main Content

Your student loan forgiveness questions, answered

Two men sit with paperwork at a table
Maskot/Getty Images
Two men sit with paperwork at a table
Maskot/Getty Images
Bankrate Logo

Why you can trust Bankrate

While we adhere to strict , this post may contain references to products from our partners. Here's an explanation for .

ON THIS PAGE Jump to Open page navigation

On Wednesday, President Biden announced a sweeping student loan forgiveness measure that’s expected to benefit 95 percent of federal borrowers. However, many borrowers are wondering whether they’re eligible and what this means for their finances in the long term.

Here’s everything you need to know about Biden’s loan forgiveness plan, who qualifies and how to apply.

Will my student loans be forgiven?

All federally owned student loans are eligible for forgiveness. If you have Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans, Direct Consolidation Loans or FFEL Loans owned by the U.S. Department of Education, they’re all included in the forgiveness plan.

Are parent PLUS loans going to be canceled?

Yes, parent PLUS loans are eligible for forgiveness as long as the borrowers meet the income requirements.

Why aren’t private loans included?

Private student loans aren’t owned by the federal government. They’re owned and disbursed by private lenders, credit unions or banks; therefore, any legislation enacted by President Biden doesn’t apply to private loans.

However, private lenders can offer targeted relief programs if you’re struggling with payments. If you have private student loans, check with your lender to see what options are available.

How much forgiveness do I qualify for?

Individual borrowers who make under $125,000 annually and married borrowers who make under $250,000 annually are eligible for up to $10,000 in federal student loan forgiveness.

Borrowers who received a federal Pell Grant are eligible for up to $20,000 in forgiveness if they meet the income requirements.

How do I check if I’ve received a Pell Grant?

To check if you’ve ever received a Pell Grant as part of your federal financial aid package, you’ll need to log into your account on the Federal Student Aid website. Be aware that right now, and likely for the next few weeks, the website has been down or operating at a slower speed due to the high volume of visitors following Wednesday’s announcement.

Can I get a refund on my student loans that I already paid off?

According to the Federal Student Aid website, borrowers can request refunds for the payments they made on federally owned student loans beginning March 13, 2020 — the start of the student loan payment pause.

To request a refund, call your servicer and let it know that you’re interested in getting a refund on your payments made after March 13, 2020, to be eligible for forgiveness. Borrowers who paid off their federal student loans in that time are still eligible for a refund and subsequent forgiveness of that balance.

Will student loan forgiveness be automatic?

The Biden administration announced that forgiveness will be automatic for nearly 8 million borrowers whose income data is already recorded with the U.S. Department of Education. However, a forgiveness policy of this size has never been enacted before, so it’s likely that there are numerous details that need to be hammered out before borrowers begin to see this reflected in their balances.

For all other borrowers, the administration announced that it will be releasing a forgiveness application prior to the (new) student loan payment pause expiration date of Dec. 31, 2022. To make sure that you get the debt relief you’ve been promised, subscribe to the Department of Education’s newsletter; doing so will ensure that you receive automated information about the application release date. Once the application is open, it’s best to apply as soon as possible.

Will I pay taxes on my canceled student debt?

Due to the Student Loan Tax Relief Act, all student loans forgiven by the federal government are not considered taxable income through 2025, so you don’t need to worry about getting a large bill come tax season for your forgiven loans.

Will my credit score go up after student loan forgiveness?

The impacts to your credit score after student loan forgiveness come down to your credit health and financial situation. After you pay off a loan, it’s not uncommon to see your score decrease by a few points, since you’re lowering the average age of your accounts and potentially hurting your credit mix. On the other hand, having your student loans forgiven could improve your debt-to-income ratio and make it easier to make timely payments on your other debt.

Written by
Hanneh Bareham
Student loans reporter
Hanneh Bareham specializes in everything related to student loans and helping you finance your next educational endeavor. She aims to help others reach their collegiate and financial goals through making student loans easier to understand.
Edited by
Student loans editor