Loan Cancellation and Consolidation
Student Loan Debt Relief
On Aug. 24, 2022, the Biden-Harris Administration announced a Student Debt Relief Plan that includes one-time student loan debt relief targeted to low- and middle-income families.
The U.S. Department of Education (ED) will provide up to $20,000 in debt relief to Federal Pell Grant recipients and up to $10,000 in debt relief to non-Pell Grant recipients. Borrowers with loans held by ED are eligible for this relief if their individual income is less than $125,000 (or $250,000 for households).
Loans must have been first disbursed prior to June 30, 2022.
Loans borrowed for 2022-23 (fall 2022, spring 2023 and summer 2023) will not be part of the student loan debt relief plan.
Borrowers have until Dec. 31, 2023, to submit an application for student debt relief.
Watch out for scammers!
Per the Federal Trade Commission, "you don’t need to do anything or pay anybody to sign up for the new program — or the pause. Nobody can get you in early, help you jump the line, or guarantee eligibility. And anybody who says they can — or tries to charge you — is (1) a liar, and (2) a scammer." See more at FTC's Did you hear about the student loan annoucements? Scammers did too.
Borrower Defense Loan Discharge
If your school misled you or engaged in other misconduct in violation of certain state laws, you may be eligible for “borrower defense to loan repayment,” sometimes shortened to “borrower defense.” This is the discharge of some or all of your federal student loan debt.
You may be eligible for borrower defense regardless of whether your school closed or you are otherwise eligible for loan discharge under other laws. You will only be eligible for this type of federal student loan discharge if your school’s misleading activities or other misconduct directly relate to the loan or to the educational services for which the loan was provided.
You will not be eligible for this type of loan discharge based on claims that are not directly related to your loan or the educational services provided by the school. For example, personal injury claims or claims based on allegations of harassment are not bases for a borrower defense application.