Here are the three main loan forgiveness opportunities for Stafford Loans:
President Biden’s mass debt cancellation plan will knock off $10 thousand for borrowers who didn’t get a Pell Grant, a type of financial aid made available to low-income undergraduate students, and $20 thousand for those who did. The relief is limited to borrowers who had less than $125 thousand or married couples earning less than $250,000.
Parent PLUS Loans and Perkins Loans are also eligible for cancellation, but private student loans aren’t eligible.
The U.S. Department of Education will determine your eligibility by looking at the adjusted gross income on your tax return for either 2020 or 2021, whichever is lower. Read more about the $20k student loan forgiveness.
The Limited Public Service Loan Forgiveness Waiver allows people who’ve worked full-time for the government or a nonprofit anytime after Oct. 1, 2007, to get credit towards PSLF. If you have an FFEL Stafford Loan, you’ll need to consolidate it into a Direct Loan before Oct. 31, 2022, to qualify for the waiver. Read more about the PSLF Waiver.
Income-driven repayment plan forgiveness writes off your remaining balance after 20+ years of making monthly payments under an IDR Plan. Later this year, the Education Department will use a one-time waiver and adjustment to retroactively credit millions of borrowers with additional payments toward IDR forgiveness.
Borrowers will get credit for the payments they made — no matter which payment plan they were in at the time. The department will also count months spent on deferment — except in school deferment — before 2013 as qualifying payments. And it will count forbearances of 12 straight months or more and 36 cumulative more or more toward forgiveness, both income-driven repayment, and the Public Service Loan Forgiveness program. Read more about the IDR Waiver.
Related: PSLF Forbearance Steering