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U.S. Federal Student Debt Relief Plan

Student Loan Relief

What is the U.S. Federal Student Debt Relief Plan?

On Wednesday, August 25, 2022, U.S. President Joe Biden announced monumental legislation positively impacting over 43 million borrowers of Americans with student loan debt.

This three-part plan which will be coordinated by the U.S. Department of Education includes:

1) Extending the Repayment Period for Federal Student Loans until December 31, 2022.

2) Cancelling Student Loans for Certain Borrowers & Streamlining the Public Service Loan Forgiveness (PSLF) Program.

3) Making the cost of college more affordable for future college-bound students.

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Federal Student Debt Relief Provision #1:

Provide a final extension for the repayment of Federal Student loans until December 31, 2022. Borrowers will not need to take any action as this extension is automatic. Federal student loan payments will resume in January 2023.

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Federal Student Debt Relief Provision -#2a

According to, “postsecondary students from households with incomes in the lowest quarter are 79.3% more likely to drop out than students from the highest quarter-income households.”

Student loan cancellation for certain low and middle-income borrowers include the following:

  1. Pell Grant Recipients will receive up to $20,000 in student loan debt cancellation.
  2. Non-Pell Grant Recipients will receive up to $10,000 in student loan debt cancellation.
  3. Only borrowers with an annual income of less than $125,000 ($250,000 for married couples) are eligible for the Student Loan Forgiveness relief benefits.

Federal Student Debt Relief Provision – #2b

Per the Department of Education, “more than 175,000 public servants have already had more than $10 billion in loan forgiveness approved” under the PSLF Program.

Borrowers who have worked full-time for a qualifying non-profit organization, military or federal, state, Tribal, or local government should qualify for forgiveness after making 120 payments.

Sign up at on or before October 31, 2022.

Enrollments after this date are not eligible for the loan forgiveness program.

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Federal Student Debt Relief Provision -#3:

Revise the income-driven repayment plans for current and future borrowers as follows:

  1. Lower the percentage of discretionary by 50 percent from 10 percent to five percent.
  2. Increase the non-discretionary income to ensure that borrowers earning 225 percent of the Federal poverty level (about $13-$15/hour) are exempt from monthly payments.
  3. For borrowers with balances of $12,000 or less, lower the number of years of repayment by 50 percent from 20 to 10 years.
  4. Ensure loan balances do not increase, due to unpaid interest, if borrowers cannot make payments due to their low-income levels.

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