Federal Student Debt Relief

Thanks to the tireless advocacy of Majority Leader Chuck Schumer

and the relentless work of thousands of activists and organizers, millions of lives will be transformed by President Biden’s three-pronged student debt plan to provide significant relief to millions of working borrowers and their families:


Federal student loans will be canceled up to $10K for all borrowers, or up to $20K for borrowers who are Pell recipients. All borrowers must have earned less than $125K individually or $250K jointly.

  • This action will provide relief to over 40 million borrowers. Roughly 20 million borrowers will have the full remainder of their balance cancelled.
  • The US Department of Education estimates that 27 million borrowers are Pell recipients, and will be eligible to receive up to $20K.
  • Nearly 90% of Debt Cancellation benefits will go to borrowers that are earning less than $75K.
  • No high-income individual or high-income household—in the top 5% of incomes—will benefit from this action.
  • Nearly all Pell grant recipients (94%) came from families with incomes of $60K or less.
  • Black borrowers are twice as likely to have received Pell grants compared to their white peers, and other borrowers of color are more likely to have received Pell as well.


The pause on federal student loan repayment will be extended one final time through December 31, 2022, resuming payments in January 2023. The extension will occur automatically.


The Department of Education is proposing a new rule for the income-driven repayment (IDR) plan that will cut monthly payments in half, as it will cap monthly payments for undergraduate loans at 5% of a borrowers’ discretionary income, half of the rate that borrowers pay under existing payment plans.

In addition, borrowers on IDR plans will have their balances forgiven after 10 years rather than 20 years for original balances of $12,000 or less. The Department estimates that this change will make nearly all of community college borrowers debt free within 10 years.

Lastly, the Department is also proposing a rule that will simplify the Public Service Loan Forgiveness program (PSLF) that builds on the PSLF waiver to credit more payments to public servants who have worked in nonprofit, in the military, or in federal, state, tribal, or local government.


FAQ | Federal Student Debt Relief

 Am I eligible?

  • Federal student loans will be canceled up to $10K for all borrowers, or up to $20K for borrowers who are Pell recipients. All borrowers must have earned less than $125K individually or $250K jointly.
  • Your relief is capped at the amount of your outstanding debt. If you are eligible for $20k worth of relief but have a balance of $10K, you will only receive $10k in relief.

 When will the student loan relief application be available?

  • The application will be available in October. Borrowers should see changes to their balances about 4-6 weeks after submitting their applications.
  • Borrowers will have until December 31, 2023 to submit their application.

 What types of loans qualify for RELIEF?

  • All Direct Loans that are held by the Department of Education. This includes undergraduate, graduate, and Parent PLUS loans.
  • Borrowers with Federal Family Education Loans (FFEL) and Perkins Loans not held by the Department of Education had to consolidate them into the Direct Loan Program prior to September 29, 2022 in order to be eligible for this relief.
  • All Direct Loans must have been disbursed by June 30th, 2022 to be eligible for this debt relief. New loans processed this Fall semester of 2022 will not be eligible.

 Who will receive automatic cancellation?

  • The Department of Education currently has income data for 8 million borrowers through recent data from IDR plans and FAFSA applications. These borrowers will receive automatic relief based on their income and Pell history.

 What income-data will be used to verify eligibility?

  • A person’s adjusted gross income from 2020 or 2021. Borrowers will need to meet the income AGI criteria for either year in order to become eligible. The Department of Education is working on establishing a portal where borrowers will self-certify their income.
  • Individuals who exceed the $125K individual income cap can still qualify if they filed jointly and earn under $250K combined.

 How will the changes to the Income-Driven Repayment plan impact borrowers?

  • Borrowers with undergraduate loans will have their monthly payments capped at 5% of their discretionary income. This is half of the rate that borrowers pay under existing plans. The Department of Education estimates that this will lower the average annual student loan payment by more than $1,000 for both current and future borrowers.
  • In addition, the remaining balances of undergraduate loans will be forgiven after 10 years rather than 20 years for borrowers with original loan balances of $12,000 or less.
  • Borrowers with graduate loans will keep their monthly payments capped at 10% of their discretionary income.
  • If a borrower has a combination of undergraduate and graduate loans, their monthly payments will be based on a weighted average rate of their income that will range between 5-10% based on the proportion of their balance that is attributable to their undergraduate vs graduate loans.
  • Under the proposed rule, any unpaid monthly interest will now be fully covered—unlike with current income-driven repayment plans—borrower’s loan balance will not grow with accrued interest as long as they make their monthly payments.

 What are the fixes to the Public Service Loan Forgiveness?

  • The changes build on the temporary changes made from the PSLF Waiver. It will count previous payments that were late, missed, or partial. This will help borrowers gain more payments that will credit towards achieving forgiveness after ten years.

STATS: Student Debt in New York

  • In 2021, 455,599 New Yorkers received Pell Grants at an average of $4,385 per person.
    • New York ranked fourth among states with the most amount of Pell recipients in the country. 
    • Those who received Pell grants and have federal loans—and meet the income criteria—will greatly benefit from the $20,000 of federal student loan cancellation.

    Source: Education Data Initiative